Calculate the user charge

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Reference no: EM133612039

Question: Population increase in northern Virginia requires new road constructions and repairs annually from 2023. More public schools will be also needed by 2032. The state of Virginia is considering an option to meet the needs for more roads and schools. The option is building toll roads financed by sales tax now and building more schools in 2032 which will be financed by revenue from toll roads. Information: Toll road building costs 2023: $30 million 2024: $25 million 2025: $10 million Annual expected number of toll road users/vehicles per day: 25,000 from 2026. User charge = $3.00 Annual expected cost of new road constructions and repairs is $3 million from 2026. Required school investment in 2032: $100 million (in 2023 $). Discount rate = 3% Will the project of building toll roads bring enough financial resource for school investment in 2032? If not, calculate the user charge (toll charge) that will bring enough financial resources for school investment in 2032.

Reference no: EM133612039

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