A newly constructed bridge costs 15000000 the same bridge


A newly constructed bridge costs $15,000,000. The same bridge is estimated to need renovation every 15 years at a cost of $3,000,000. Annual repairs and maintenance are estimated to be $1,000,000 per year. (a) If the interest rate is 5%, determine the capitalized cost of the bridge. (b) Suppose that in (a), the bridge must be renovated every 20 years, not every 15 years. What is the capitalized cost of the bridge? 

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Microeconomics: A newly constructed bridge costs 15000000 the same bridge
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