Economics 2. A bridge connecting two towns costs $15,000,000, has an average annual operating cost of $450,000 and a life of 50 years. It requires a onetime major overhaul in 25 years at a cost of $1,800,000. The sponsors of the project can collect an average toll of $2.50 for each passing vehicle. There will be also $3,000, 000 annual benefits to the communities due to time savings and accident reduction from shorter trips. The total (two-way) annual traffic rate is 1,000,000 vehicles. Determine if this public project is justified (i=5%). The project is justified O The project is not justified
Economics 2. A bridge connecting two towns costs $15,000,000, has an average annual operating cost of $450,000 and a life of 50 years. It requires a onetime major overhaul in 25 years at a cost of $1,800,000. The sponsors of the project can collect an average toll of $2.50 for each passing vehicle. There will be also $3,000, 000 annual benefits to the communities due to time savings and accident reduction from shorter trips. The total (two-way) annual traffic rate is 1,000,000 vehicles. Determine if this public project is justified (i=5%). The project is justified O The project is not justified
Chapter1: Making Economics Decisions
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![Economics
2. A bridge connecting two towns costs $15,000,000, has an
average annual operating cost of $450,000 and a life of 50 years. It
requires a onetime major overhaul in 25 years at a cost of
$1,800,000. The sponsors of the project can collect an average toll
of $2.50 for each passing vehicle. There will be also $3,000, 000
annual benefits to the communities due to time savings and accident
reduction from shorter trips. The total (two-way) annual traffic rate is
1,000,000 vehicles. Determine if this public project is justified
(i=5%).
The project is justified
O The project is not justified](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4434a8a-f9ad-468f-a09c-db749fffa02b%2F7e1c1c3a-87a2-436c-9398-e69a5089c990%2Fouuxehw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Economics
2. A bridge connecting two towns costs $15,000,000, has an
average annual operating cost of $450,000 and a life of 50 years. It
requires a onetime major overhaul in 25 years at a cost of
$1,800,000. The sponsors of the project can collect an average toll
of $2.50 for each passing vehicle. There will be also $3,000, 000
annual benefits to the communities due to time savings and accident
reduction from shorter trips. The total (two-way) annual traffic rate is
1,000,000 vehicles. Determine if this public project is justified
(i=5%).
The project is justified
O The project is not justified
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