The scores for each alternative and recommendation of a preferred alternative for development.

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Chapter 13, Problem 20P

To determine

The scores for each alternative and recommendation of a preferred alternative for development.

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The Department of Traffic is considering three improvement plans for a heavily traveled intersection within the city. The intersection 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 as well as additional construction and maintenancecosts is shown in the table below. If the economic life of the road is considered to be 60 years and the discount rate is 3.5%, which alternative should be selected? Solve the problem using the four methods for economic analysis.

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Three designs have been proposed to improve traffic flow at a major intersection in a heavily traveled suburban area. The first alternative involves improved traffic signaling. The second alternative includes traffic-signal improvements and intersection widening for exclusive left turns. The third alternative includes extensive reconstruction, including a grade separation structure. The construction costs, as well as annual maintenance and user costs, are listed in the following table for each alternative. Determine which alternative is preferred based on economic criteria if the analysis period is 20 years and the annual interest rate is 15%. Show that the result is the same using the present worth, equivalent annual cost, benefit–cost ratio, and rate-of-return methods. Alternatives Capital Cost ($) Annual Maintence ($) Annual User Cost ($) Salvage Value ($) Present Condition 0 15,000 600,000 0 Traffic Signal 340,000 10,000 450,000 25,000 Intersection Widening 850,000 5,000…