Find the mean value of the expansions

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A new 2-lane STREET is needed in a part of town that is growing. At some point the road will need 4 lanes to handle anticipated traffic. If the citys optimistic estimate of growth is used, the expansion will be needed in 4 years. For the most likely and pessimistic estimates, the expansion will be needed in 8 and 15 years, respectively. The expansion will cost $4.2 million. Use interest rate of 8%.

a. What is the PW for each scenario, and what is the range of values?

b. Find the mean value of the expansions.

 

Reference no: EM13269816

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