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 maintenance costs 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.

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 maintenance costs 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.

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

5th Edition

ISBN:9781305084766

Author:Saeed Moaveni

Publisher:Saeed Moaveni

Chapter20: Engineering Economics

Section: Chapter Questions

Problem 19P

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