A state’s transportation department is proposing the construction of a new commuter vehicle bypass tunnel approaching a toll plaza. Preliminary cost data is presented below;
First Cost $800,000,000
Annual O & M Costs $14,000,000
Salvage Value $225,000,000 (recyclables)
Safety Refurbishment $45,000,000 (every 10 years)
Safety Inspection $1,200,000 (every 5 years)
Interest Rate (MARR) 5%
Useful Life 100 years
Determine the equal annual costs (EAC) the department will incur for this proposal. (i.e. , Perform an annual worth analysis)