Atoll bridge across the mississippi river is being considered as a replacement for the current i-40 bridge linking tennessee to arkansas. because this bridge, if approved, will become a part of the u. s. interstate highway system, the b-c ratio method must be applied in the evaluation. investment costs of the structure are estimated to be $17 comma 800 comma 000, and $340 comma 000 per year in operating and maintenance costs are anticipated. in addition, the bridge must be resurfaced every fourth year of its 20-year projected life at a cost of $1 comma 210 comma 000 per occurrence (no resurfacing cost in year 20). revenues generated from the toll are anticipated to be $2 comma 300 comma 000 in its first year of operation, with a projected annual rate of increase of 2.75% per year due to the anticipated annual increase in traffic across the bridge. assuming zero market (salvage) value for the bridge at the end of 20 years and a marr of 12% per year, should the toll bridge be constructed? also, assume that the initial surfacing of the bridge is included in the initial investment costs of the structure.
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