Instruction: Solve the following problem. Show your work clearly and points. nea
ID: 345247 • Letter: I
Question
Instruction: Solve the following problem. Show your work clearly and points. neatly. The problem earries Ju The Indiana Department of Transportation (INDOT) is planning to maintain its existing highways using asphalt hot-patching. For the asphalt hot-patch method, approximately 500 cubic feet of material is required at a cost of $800/cubic feet (in place). The highway shoulders should be improved at the same time at a cost of $24,000. The shoulders must be maintained at year 5 at a cost of $3000. The annual cost of routine maintenance on the patched road is estimated to be $6000. Determine the uniform annual cost of the project in the pavement life cycle if the pavement has a service life of 10 years. Use an interest rate of 8%.Explanation / Answer
Initial cost = $ 800 * 500 + $ 24,000
Initial cost = $ 424,000
Uniform annual cost = $ 424,000 ( A/P , 8% , 10 years ) + $ 6000 + $ 3000 ( P/F , 8% , 5 years )
Uniform annual cost = $ 424,000 * 0.149029 + $ 6000 + $ 3000 * 0.680583
Uniform annual cost = $ 71,230.05