8. For what lifetime of cast- in-place concrete curbs in question #7 below (inst

Question

8. For what lifetime of cast- in-place concrete curbs in question #7 below (instead of 50 years) will the two alternatives be equally attractive, if all other conditions remain the same? a) 5 b) 10 c) 15 d) 20

7. Roadway engineers must decide whether to specify granite or cast-in-place concrete curbs. Suppose granite curbs cost $27 per linear foot, installed, and last 100 years, while cast-in-place concrete curbs cost $13.50 per linear foot, installed, and last 50 years. With interest at 7%, which do you recommend?

Explanation / Answer

Let the number of years be N. Two alternatives will be equally attractive when their annual
equivalent cost is same.
27(A/P, 7%, 100) = 13.50(A/P, 7%, N)
27*0.070081 = 13.50*(A/P, 7%, N)
(A/P, 7%, N) = 0.140162
Using trial and error, it can be found that when N = 5, (A/P, 7%, N) is 0.2438. When N = 10,
(A/P, 7%, N) = 0.1423, when N = 0.1097. Hence closest answer is N = 10.

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.