FACT: The Burnside Bridge is 92 years old and would suffer extensive damage in a Cascadia Subduction Zone earthquake. Multnomah County will decided by fall 2018 whether to fully replace the bridge or undergo an enhanced seismic retrofit.
The bridge is also currently undergoing a maintenance project that is estimated to cost $20 million.
Suppose the county expects to incur the following cost for each option:
Direct labor $150M
Direct materials $300M
Overhead (includng $80M in design cost) $115M
Direct labor $115M
Direct materials $200M
Overhead (including $60M in design costs) $100M
QUESTION: What is the total relevant cost of each project? Given this limited data, which project would you recommend that the county pursue? What qualitative factors influenced your recommendation?