Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 19

The Public Service Board (PSB) awarded two contracts worth a combined $1.07 million to improve (i.e., deepen) a retention basin and reconstruct the spillway that was severely damaged in a fl ood 2 years ago. The PSB said that, because of the weak economy, the bids came in $950,000 lower than engineers expected. If the projects are assumed to have a 20-year life, what is the annual worth of the savings at an interest rate of 6% per year