A bridge design firm is performing an economic analysis of two mutually exclusiv
ID: 2415693 • Letter: A
Question
A bridge design firm is performing an economic analysis of two mutually exclusive designs for a highway overpass. The steel girder option has an initial cost of $2.08 million, and the concrete option has an initial cost of $2.5 million. Every 25 years, the steel bridge must be painted at a cost of $650,000, and all other maintenance costs are the same for both options. The steel bridge is expected to last 50 years, and concrete bridge is expected to last 75 years. Both are assumed to be identically replaced indefinitely. Based on the shortest acceptable analysis period for each option, determine the equivalent uniform annual cost (EUAC) for the best option using an interest rate of 7%. Express your answer in $ to the nearest $1,000.
Answer is 159394 to check your work
Explanation / Answer
option 1 option 2 steel bridge concrete bridge rate 7% 7% initial cost -2.08 -2.5 life 50 75 cost after every 25 years 0.65 0 PV -0.141828 0 a total cost -2.221828 -2.5 b AF @ 7% 13.8007 14.1964 EUAC -0.160993863 -0.176100983
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