Question

Please Calculate the expected PW value for building and widening a​ two-lane bridge. Will rate highly.

A bridge is to be constructed now as part of a new road. An analysis has shown that traffic density on the new road will justify a two-lane bridge at the present time. Because of uncertainty regarding future use of the road, the time at which an extra two lanes will be required is currently being studied. The estimated probabilities of having to widen the bridge to four lanes at various times the future are as follows: Widen Bridge In Probability 0.15 3 years 4 years 5 years 6 years 0.2 0.4 0.25 The present estimated cost of the two-lane bridge is $1,900,000. If constructed now, the four-lane bridge will cost $3,900,000. The future cost of widening a two lane bridge will be an extra $2,000,000 plus $200,000 for every year that widening is delayed. If money can earn 13% per year, what would you recommend? B Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% ner vear The PW value for building a four-lane bridge now is $ -3900 thousand. (Round to the nearest whole number.) Calculate the expected PW value for building and widening a two-lane bridge. E(PWbuilding -3493| thousand (Round to the nearest whole number.) and widening two-lane = Discrete Compounding; i=13% Single Payment Compound Amount Uniform Series Compound Amount Sinking Fund Capital Recovery Factor Present Present Factor Worth Factor Factor Worth Factor Factor To Find A To Find F To Find P To Find F To Find P To Find A Given P Given F Given A Given A Given F Given P FIA PIA AIF FIP PIF AIP 1.1300 1 0.8850 1.0000 0.8850 1.0000 1.1300 2 1.2769 0.7831 2.1300 1.6681 0.4695 0.5995 0.6931 2.3612 0.2935 0.4235 1.4429 3.4069 4 4.8498 0.2062 0.3362 1.6305 0.6133 2.9745 1.8424 0.5428 6.4803 3.5172 0.1543 0.2843 2.0820 0.4803 8.3227 3.9975 0.1202 0.2502 2.3526 10.4047 0.0961 0.4251 4.4226 0.2261 CON

Answer 1

Answer

The expected PW value for building and widening a two-lane bridge is calculated as follows -

Year of expansion	PW of Expansion Expenses
3	-[$2,000,000+(3)($200,000)](P/F,13%,3)= -$1,802,060
4	-[$2,000,000+(4)($200,000)](P/F,13%,4)= -$1,717,240
5	-[$2,000,000+(5)($200,000)](P/F,13%,5)= -$1,628,400
6	-[$2,000,000+(6)($200,000)](P/F,13%,6)= -$1,536,960

Expected (PW)= -$2,000,000-$1,802,060*(0.15)-1,717,240*(0.2)-$1,628,400*(0.4)-$1,536,960*(0.25)

Expected (PW)=-1,900,000-270,309-343,448-651,360-384,240

Expected (PW)=-$3,549,357

The expected PW value for building and widening a two-lane bridge is -$3,549,357