10-3. A proposal has been made for improving the downtown area of a small town. The plan calls for banning vehicular traffic on the main street and turning this street into a pedestrian mall with tree plantings and other beautification features. This plan will involve actual costs of $7,500,000 and, according to its proponents, the plan will produce benefits and disbenefits to the town as follows:
Benefits:
Increased sales tax revenue $475,000 per year Increased real estate property taxes $300,000 per year Benefits due to decreased air pollution $80,000 per year Quality of life improvements to users $75,000 per year Disbenefits:
Increased maintenance $225,000 per year

a. Compute the B–C ratio of this plan based on a MARR of 10% per year and an infinite life for the project. (10.7)

b. How does the B–C ratio change for a 20-year project life? (10.7)