Question

The Dept. of Transportation is comparing two alternative pavement designs with the following cost characteristics. Determine the least expensive alternative with a method of your choice. i=5% per year compounded annually.  

Construction Cost at year 0

Maintenance Cost from years 1-20

Year	A	B
0	$450,000	$700,000
1
2
3	$40,000
4
5		$50,000
6	$40,000
7
8
9	$40,000
10		$50,000
11
12	End of Service
13
14
15		$500,000
16
17
18
19
20		End of Service

Answer 1

equivalent uniform annual worth method is best suitable for the alternarives having different lifespan.

the alternative having lesser equivalent uniform annual cost is least expansive.

in the above problem

alternative A has equivalent uniform annual cost   

alternative B has equivalent uniform annual cost

hence alternative A is least  expansive.

**** there should be a small correction in the cost of alternative B at 15th yr (it should be in place of )

solution is done by taking