Problem:
The city bridge inspection team had noted 4 bridges that need replacement. Resources are available to do one of these. Proposals to repair them have been received as follows. Also shown are the number of vehicles per year that use each bridge that is an indicator of the size of the problem if the bridge would fail. Using a 10 year time span and a discount rate (MARR) of 7%, which one should be chosen.
| Proposal |
Costs to Replace |
Cars per year |
| Oak Strret Bridge |
$19,000,000 |
14,500,000 |
| 2nd Ave. Bridge |
$20,000,000 |
14,000,000 |
| River Street Bridge |
$21,500,000 |
16,000,000 |
| Lincon Avenue Bridge |
$22,000,000 |
16,500,000 |