A transportation engineer received a request to
install dynamic traffic signals to replace static vehicle control
devices at an intersection. The engineer must prepare an estimate
of an operating budget for a ten-year period, if the signals were
installed. The initial cost of the signals is $35,000 and the
installation costs are $12,000. The estimated energy cost to
operate the signals for the first year is $1,000. The energy cost
is expected to increase uniformly each year by $15 of the first
year’s energy cost. Assume an interest rate of 8%. What is the EUAC
for the operating budget? Salvage value at the end of the ten-year
period is negligible.

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