Testing new restoration and maintenance resurfacing project

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Reference no: EM13837944

The DOT is testing a new restoration & maintenance resurfacing project. The annual cost of the new equipment is $120,000/year and material cost is $4/mile. Alternatively, the traditional process requires equipment that cost $150,000 today with a 15 year life with no salvage. The variable cost for traditional resurfacing is $15/mile. With an interest rate of 6%/year how many miles/year need to be resurfaced for the two methods to break even?

Reference no: EM13837944

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