My Math Forum Should the two-stage or one-stage construction be selected?
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 March 4th, 2010, 04:13 AM #1 Newbie   Joined: Mar 2010 Posts: 3 Thanks: 0 Should the two-stage or one-stage construction be selected? Problem statement: The State of Georgia wants to build a new railway from Atlanta to Rome, Georgia. A two-lane highway can be built now for $300 million and can be enlarged adding two more lanes 25 years from now for an additional$350 million to accommodate future growth. An alternative is to construct the four-lane highway (full-sized) now for $400 million. Both alternatives would provide the needed capacity for the 50-year analysis period. Maintenance costs are minimal and can be ignored. At a 6% interest rate, should the two-stage or one-stage construction be selected? I'm assuming that building the high-way now for$400 is cheaper, but I'm not sure how to do the math.
 March 4th, 2010, 07:14 AM #2 Global Moderator     Joined: Nov 2006 From: UTC -5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms Re: Should the two-stage or one-stage construction be selected? How much would you have to save now to have \$350 million in 25 years?

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