4.Consider the following a highway investment with the following characteristics: a. Construction cost: $50,000,000 b. Annual highway operating cost: $500,000 c. Service life: 25 years d. Interest rate: 6% e. Year 1 traffic: 1,000,000 vehicles per year f. Year 1 savings in travel time: 30 minutes, value of travel time savings is $15.00 per hour g. Traffic growth rate: 2% per year compounded annually a. What is the benefit-cost ratio?

4.Consider the following a highway investment with the following characteristics: a. Construction cost: $50,000,000 b. Annual highway operating cost: $500,000 c. Service life: 25 years d. Interest rate: 6% e. Year 1 traffic: 1,000,000 vehicles per year f. Year 1 savings in travel time: 30 minutes, value of travel time savings is $15.00 per hour g. Traffic growth rate: 2% per year compounded annually a. What is the benefit-cost ratio?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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