Question: the Texas DOT is comparing two alternative payment treatment with the following characteristic For each alternative, estimate the probability to have annualized constructioncost lower than

the Texas DOT is comparing two alternative payment treatment with the following characteristic For each alternative, estimate the probability to have annualized constructioncost lower than $20k/year.

The Texas DOT is comparing two alternative pavement treatments with the following characteristics. For each alternative. estimate the probability to have an annualized construction cost lower than $20k/year. As a result, which alternative would you recommend? The interest rate is 5% per year compounded annually and inflation runs at 2.4% per year. Treatment Construction cost/lane-mile $130k $220k Overlay Reconstruction 6 (15%) 11 (20%) Service Life Years (probability) 7 (25%) 8 (35%) 9 (15%) 12 (25%) 13 (35%) 14 (1296) 10 (10%) 15 (8%)

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