What is expected equivalent annual construction cost per mile?

A road between Fairbanks and Nome, Alaska, will have a most likely construction cost of $4million per mile. Doubling this cost is considered to have…

A road between Fairbanks and Nome, Alaska, will have a most likely construction cost of $4million per mile. Doubling this cost is considered to have a probability of 30%, and cutting it by 25% is considered to have a probability of 10%. The State’s interest rate is 8%, and the road should last 40 years. What is the expected equivalent annual construction cost per mile?
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