pavement will be equivalent to a new pavement. All

cost estimates should be based on current prices.

The results of the pavement condition evaluation and

the guidelines for M&R selection may indicate that the

engineer should consider more than one M&R

(PW) for each M&R alternative is computed as follows:

alternative. Selecting the best alternative often requires

performing an economic analysis to compare the cost-

effectiveness of all feasible alternatives. This chapter

presents an economic analysis procedure which

compares M&R alternatives based on present worth.

The procedure for determining the present worth of each

M&R alternative consists of the steps described below.

analysis period (in years). The period generally used in

pavement analysis ranges from 10 to 30 years,

depending on future use of the section (abandonment,

change of mission, etc.). The analysis period should be

the same for all alternatives.

rates to be used in calculating the present cost should

be obtained from the installation comptroller. This is a

very important step, since the selected rates have a

significant impact on the ranking to the alternatives with

respect to their present worth. The selection of the

The physical interpretation of equation 5-1 is that the

rates, therefore, should be based on Army policies and

present worth of any M&R alternative is the sum of all

guidelines. It should also be noted that the inflation rate

the discounted M&R costs during the analysis period

used to compute present worth is the differential

plus the cost of rehabilitating the pavement at the end of

inflation rate, i.e., the rate of cost increase above the

the analysis period (so that it will be equivalent to a new

general inflation rate. Therefore, if the cost increase of

pavement), discounted to the present. After the steps

a specific item is in line with the cost growth

described in a through d above are completed for each

experienced by the economy, the differential inflation

M&R alternative, the present worth's of all M&R

rate is assumed to be zero. For example, if the cost of

alternatives are compared to help the pavement

M&R for asphalt pavements is increasing at an annual

engineer select the most cost-effective repair alternative

inflation rate of 14 percent while the general inflation

rate is 8 percent, the differential inflation is 6 percent.

predictions and assumptions must be made to perform

the economic analysis. The engineer must therefore

be estimated for each M&R alternative for every year

use judgment in selecting the best inputs.

work is planned during the analysis period. The cost of

rehabilitation at the end of the analysis period for each

M&R alternative should also be determined so that the

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