Calculate the Rate of Return by Replacing Concrete Sidewalks with Rubber Sidewalks

What is the rate of return in replacing concrete sidewalks with rubber sidewalks in the city of Fairbanks?

How does the lifespan of rubber sidewalks compared to concrete sidewalks impact cost savings for the city?

Rate of Return:

The rate of return by replacing concrete sidewalks with rubber sidewalks in the city of Fairbanks is approximately 107.14%.

Impact of Longer Lifespan:

The rubber sidewalks have a longer lifespan of 9 years compared to the concrete sidewalks for 3 years. This results in less frequent replacement and maintenance, leading to cost savings for the city.

Replacing the concrete sidewalks with rubber sidewalks in Fairbanks has several benefits. Firstly, the rubber sidewalks have a longer lifespan of 9 years compared to the concrete sidewalks, which only last 3 years. This means that the rubber sidewalks require less frequent replacement and maintenance, resulting in cost savings for the city.

Additionally, the rubber sidewalks are environmentally friendly and easier on people's knees, providing a more comfortable and sustainable walking surface. To calculate the rate of return, we need to consider the initial investment and the savings over the lifespan of the rubber sidewalks.

The city of Fairbanks spent $60,000 to install the rubber sidewalk, whereas the cost of a concrete sidewalk is $28,000 every 3 years. By using rubber sidewalks, the city saves $28,000 in years 0, 3, 6, and 9. To calculate the rate of return, we can divide the total savings ($112,000) by the initial investment ($60,000) and multiply by 100. This gives us a rate of return of approximately 107.14%.

This means that the city will recoup its initial investment and save an additional 107.14% over the lifespan of the rubber sidewalks.