Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 32

Providing restrooms at parks, zoos, and other cityowned recreation facilities is a considerable expense for municipal governments. City councils usually opt for permanent restrooms in larger parks and portable restrooms in smaller ones. The cost of renting and servicing a portable restroom is $7500 per year. In one northeastern municipality, the parks director informed the city council that the cost of constructing a permanent restroom is $218,000 and the annual cost of maintaining it is $12,000. He remarked that the rather high cost is due to the necessity to use expensive materials and construction techniques that are tailored to minimize damage from vandalism that often occurs in unattended public facilities. If the useful life of a permanent restroom is assumed to be 20 years, how many portable restrooms could the city afford to rent each year and break even with the cost of one permanent facility Let the interest rate be 6% per year.