Maintenance to minimize the overall equivalent annual cost

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The initial cost of a bridge that is expected to be in place forever is $7O llion. Maintenance can be done at 1-, 2-, 3-, or 4-year intervals, but the longer the interval between servicing, the higher the cost. The costs of servicing are estimated at $83,OOO $91 ,OOO, 125, COO, and 1 83,OOO for intervals of l through 4 years, respectively. What interval should be scheduled for maintenance to minimize the overall equivalent annual cost? The interest rate is 3 per year.

- Show your work when doing calculation and cash flow diagram. Type formulas and make sure in include units.

Reference no: EM131300294

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