High Road Low Road $275,000 $425,000 Construction cost/mile Number of miles required 35 Annual benefit/car-mile $0.02 Annual O&M costs/mile $2,000 15 $0.04 $10,000
High Road Low Road $275,000 $425,000 Construction cost/mile Number of miles required 35 Annual benefit/car-mile $0.02 Annual O&M costs/mile $2,000 15 $0.04 $10,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Two different routes are being considered for a mountain highway. The high road would require building several bridges and would navigate around the highest mountain points, thus requiring more roadway. The low road would construct several tunnels for a more direct route through the mountains. Projected travel volume for this new section of road is 3500 cars per day. Use the modified B/C ratio to determine which alternative should be recommended. Assume that project life is 45 years and i = 5%
Transcribed Image Text:High Road Low Road
$275,000 $425,000
Construction cost/mile
Number of miles required 35
Annual benefit/car-mile $0.02
Annual O&M costs/mile $2,000
15
$0.04
$10,000
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