The Department of Traffic is considering three improvement plans for a heavily traveled road within the city. The road improvement is expected to achieve three goals: improve travel speeds, increase safety, and reduce operating expenses for motorists. The annual dollar value of savings compared with existing conditions for each criterion and additional construction and maintenance costs is shown in Table 1. If the economic life of the road is considered to be 53 years and the discount rate is 4%, which alternative should be selected? Evaluate the two proposals based on economic evaluation criteria using the Net Present Worth (NPW) and benefit-cost ratio (BCR) methods for economic analysis
The Department of Traffic is considering three improvement plans for a heavily traveled road within the city. The road improvement is expected to achieve three goals: improve travel speeds, increase safety, and reduce operating expenses for motorists. The annual dollar value of savings compared with existing conditions for each criterion and additional construction and maintenance costs is shown in Table 1. If the economic life of the road is considered to be 53 years and the discount rate is 4%, which alternative should be selected? Evaluate the two proposals based on economic evaluation criteria using the Net Present Worth (NPW) and benefit-cost ratio (BCR) methods for economic analysis.
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