The city bridge inspection team has noted 4 bridges that need replacement. Resou
ID: 2624878 • Letter: T
Question
The city bridge inspection team has noted 4 bridges that need replacement. Resources are available to do one of these. Estimates for the replacement costs have been received as follows where the cost reflects the accessibiltiy of the site, length, heigth etc. Also shown are the number of vehicles per year that use each bridge that is an indicator of the size of the problem if the bridge would fail. Using a 10 year time span, which one should be chosen. Please Provide excel file and formulas.
Proposal
Costs to Replace
Cars per year
Oak Strret Bridge
$19,000,000
14,500,000
2nd Ave. Bridge
$20,000,000
14,000,000
River Street Bridge
$21,500,000
16,000,000
Lincon Avenue Bridge
$22,000,000
16,500,000
The city bridge inspection team has noted 4 bridges that need replacement. Resources are available to do one of these. Estimates for the replacement costs have been received as follows where the cost reflects the accessibiltiy of the site, length, heigth etc. Also shown are the number of vehicles per year that use each bridge that is an indicator of the size of the problem if the bridge would fail. Using a 10 year time span, which one should be chosen. Please Provide excel file and formulas.
Proposal
Costs to Replace
Cars per year
Oak Strret Bridge
$19,000,000
14,500,000
2nd Ave. Bridge
$20,000,000
14,000,000
River Street Bridge
$21,500,000
16,000,000
Lincon Avenue Bridge
$22,000,000
16,500,000
Explanation / Answer
Present value of annual cost= Costs to replace Annuity factor= (1-1/1.07^10)/7%= 7.023581541 Proposal Costs to Replace Cars per year Annuity Factor Annual cost (Cost to replace/annuity fator) Annual cost per car Oak Strret Bridge $19,000,000 14,500,000 7.02358154 $2,705,172.55 $0.1866 2nd Ave. Bridge $20,000,000 14,000,000 7.02358154 $2,847,550.05 $0.2034 River Street Bridge $21,500,000 16,000,000 7.02358154 $3,061,116.31 $0.1913 Lincon Avenue Bridge $22,000,000 16,500,000 7.02358154 $3,132,305.06 $0.1898 Annual cost per car is least for Oak Street Bridge and hence this bridge should be replaced
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