Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 10, Problem 28FE
To determine
Calculated the maximum investment.
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Explain how the viewpoint established before a public sector analysis is started can turn an estimate from being categorized as a disbenefit to a cost, or vice versa.
Calculate the conventional B-C ratio using AW. Write in four decimal places.
Toll lanes on a section of the 1-40 freeway are being considered in order to reduce traffic congestion and travel times.
Since this is a government project, the B-C ratio method must be applied in the evaluation. The following are cost and other estimates:
Construction costs $18,500,000
Operating and maintenance costs = $690,000 per year
Projected service life = 20 years
Savings in travel times and revenues generated from the tolls = $3,060,000 in the first year of operation and projected to increase by 1.8% per year due to the projected annual increase in traffic.
In addition, environmental analysis estimates that the project will result in increased noise and air pollution that will cause an additional societal health cost of $864,000 the first year and is also
projected to increase at 1.8% per year.
Assuming zero market (salvage) value at the end of 20 years and a MARR of 13% per year, should the toll lanes be constructed?
Click the icon to view the interest and annuity table for…
Chapter 10 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 10 - The Adams Construction Company is bidding on a...Ch. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - A retrofitted space-heating system is being...Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10P
Ch. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Four mutually exclusive projects are being...Ch. 10 - Two municipal cell tower designs are being...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - You have been requested to recommend one of the...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26FECh. 10 - Prob. 27FECh. 10 - Prob. 28FECh. 10 - A flood control project with a life of 16 years...Ch. 10 - Prob. 30FECh. 10 - Prob. 31FE
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- Calculate the modified and conventional B-C Ratio using AW in four decimal places. Is the project acceptable?arrow_forwardA consultant, after 3 months of work, reported that the modified B/C ratio for a city-owned hospital heliport project is 2. If the initial cost is $2.1 million and the annual benefits are $165,000, what is the amount of the annual M&O costs used in the calculation? The report stated that a discount rate of 5% per year and an estimated life of 40 years were used. The M&O cost is $arrow_forwardThe modified B/C ratio for a city-owned hospital heliport project is 1.7. The initial cost is $0.6 million, annual benefits are $150,000, and the estimated life is 29 years. What is the amount of the annual M&O costs used in the calculation at a discount rate of 6% per year? The annual M&O costs is $ .arrow_forward
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