1. RR must build a tunnel to maintain his access around the
mountain. The tunnel could be fabricated of normal steel for an
initial cost of $45,000 and should last for 12 years. Maintenance
will cost $1,000 per year.

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Another option would be to use corrosion resistant steel, which
will last for 12 years, with annual maintenance cost of $100. In 12
years there would be no salvage value for either bridge. RR pays
combined federal and state taxes at the 45% marginal rate and uses
straight-line depreciation. If the after tax MARR is 12%, what is
the maximum amount that should be spent on the corrosion-resistant
tunnel?

Enter your answer as follow: 123456.78

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