Lecture-22-why unit cost

# The unit cost solution the pick an interest rate and

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Unformatted text preview: nterest rate and discount a full life cycle of each roads costs back to the start of the road life. 0 1 2 7 8 9 10 11 12 \$200,000 \$10,000,000 \$20,000,000 \$30,000,000 \$40,000,000 \$200,000,000 -\$620,651,717 \$120,000,000 17 18 19 20 21 \$200,000 \$10,000,000 \$20,000,000 \$30,000,000 \$40,000,000 Interest Rate 4.5% for tax free bonds Convert to Annual Cost Convert Stretch this money into equal annual Payments Over the Life of the Road -\$620,651,717* A/P4.5,20 = -\$47,713,311/year 0.07688 Lets Do This With Class Assistant on the Concrete Highway! Concrete 0 1 23 8 13 18 23 28 33 \$200,000 \$200,000 \$150,000,000 -\$187,000,000 each 38 43 48 \$200,000 \$150,000,000 Go to the Cash Flow Analyzer Section Section Set in our 4.5% Interest rate Set it for annual compounding Enter the Cash...
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## This note was uploaded on 02/02/2013 for the course ECON 361 taught by Professor Paulbradley during the Spring '13 term at SIU Carbondale.

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