A transportation engineer received a request to installed dynamic traffic signal

Question

A transportation engineer received a request to installed dynamic traffic signals to replace static vehicle control devices at an intersection. The engineer must prepare an estimate of an operating budget for a ten year period, if the signal were installed. The intial cost of the signals is $35,000 and the installation costs are $12,000. The estimated energy cost to operate the signals for the first year $1,000. The energy cost is expected to increase uniformly each year by 1.5% of the first year's energy cost. Assume an interest rate of 8%. What is the EUAC for the operating budget? Salvage at the end of the ten year period is negligible

Explanation / Answer

Year Operating cost EUAC 1 1000 925.9 2 1015 870.2 3 1030 817.8 4 1046 768.6 5 1061 722.3 6 1077 678.9 7 1093 638.0 8 1110 599.6 9 1126 563.5 10 1143 529.6 Total EUAC for the operating budget 7114.5

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