Rubber sidewalks made from ground up tires are
said to be environmentally friendly and easier on
people’s knees. Rubber sidewalks, Inc. of Gardena,
California, manufactures the small rubberized
squares that are being installed where tree roots,
freezing weather, and snow removal have required
sidewalk replacement or major repairs every
3 years. The District of Columbia spent $60,000 for
a rubber sidewalk to replace broken concrete in a
residential neighborhood lined with towering willow
oaks. If a concrete sidewalk costs $28,000 and lasts only 3 years versus a 9-year life for the rubber
sidewalks, what rate of return does this represent?