The Estrella-Pantaleon Bridge connecting Estrella, Makati City to Barangka Drive in Mandaluyong is a 506- meter bridge that would have four lanes and is seen to accommodate an average of 50,000...

The Estrella-Pantaleon Bridge connecting Estrella, Makati City to Barangka Drive in Mandaluyong is a 506- meter bridge that would have four lanes and is seen to accommodate an average of 50,000 vehicles daily. The Department of Public Works and Highways reported that the standard width of a 2-lane road is 6.7 meters and asphalt overlay is estimated to cost PhP 11,000/m2. If the asphalt road requires no maintenance at the end of two years but PhP 200, 000.00 is allotted for repairs per year during the period. After this, PhP 500, 000.00 will be needed for repairs at the end of each year for the next 5 years, then PhP 800,000.00 at the end of each year for the next 5 years.

a) What is the total initial cost of the asphalt overlay?

b) Draw the cash flow diagram for the expenses of the repair and maintenance.

c) What is the equivalent annual cost for the 12-year period if the money is worth 14% compounded annually?

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