A road between Yellowknife, NWT and Uranium City, Saskatchewan will have a most likely construction cost of $5 million per mile

Economics Mar 27, 2022

A road between Yellowknife, NWT and Uranium City, Saskatchewan will have a most likely construction cost of $5 million per mile. Doubling this cost is considered to have a probability of 30%, and cutting it by 25% to have a probability of 10%. The government uses an interest rate of 8% for these types of projects, and the road should last 40 years. Calculate the expected value of the equivalent annual construction cost per mile