The State Highway Department is considering a bypass loop that is expected to save motorists $820,000 per

Question:

The State Highway Department is considering a bypass loop that is expected to save motorists $820,000 per year in gasoline and other automobilerelated expenses. However, local businesses will experience revenue losses estimated to be $135,000 each year. The cost of the loop will be $9,000,000.

(a) Calculate the conventional B/C ratio using an interest rate of 6% per year and a 20-year project period.

(b) Calculate the conventional B/C ratio without considering the disbenefits. Is the project economically justified with and without considering the revenue losses?

(c) Develop the single-cell spreadsheet functions that will answer the two questions above.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Engineering Economy

ISBN: 978-0073523439

8th edition

Authors: Leland T. Blank, Anthony Tarquin

Question Posted: