Northern Tundra Telephone (NTT) has received a contract to install emergency phones along a new 100-mile section of the Snow-Moose Turnpike. Fifty emergency phone systems will be installed about 2 miles apart. The material cost of a unit is $125. NTT will need to run underground communication lines that cost NTT $7500 per mile (including labor) to install. There will also be a one-time cost of $10,000 to network these phones into NTT's current communication system.
(a) Develop a cost estimate of the project from NTT's perspective.
(b) If NTT adds a profit margin of 35% to its costs, how much will it cost the state to fund the project?