Argentina considering bridge across the Rio de la Plata. At 50 miles long, it would be longest bridge in the world. It would reduce travel to from Buenos Aires to San Paulo Brazil by 10 hours, improving the flow of goods between two countries. The estimated cost is $700 million with an annual maintenance $10 million per year. The life is estimated at 80 years. Each vehicle will be charges a toll of $90 per vehicle. The use estimate is 550,000 vehicles for the first year plus an additional 50,000 per year for the next 10 years. For the remaining 70 years, the number of vehicles is estimated at 1,000,000 vehicles per year. Argentina wants a 9% rate of return. Is this a good investment? The present worth was calculated at $38 million (see calculation below).

PW = -700 M – 10M(P/A, 9%, 80) + 550000(90)(P/A,9%,10) + 50000(90)(P/G,9%,10) + 1M(90)(P/A,9%,70) (P/F,9%,10) = $38,000,000