Question
1. A new city park is developed at the cost of $500,000. It is expected to last for 20 years, having a salvage value of
1. A new city park is developed at the cost of $500,000. It is expected to last for 20 years, having a salvage value of $50,000 at that time, with annual maintenance costs of $25,000. If there are 4,500 visitors a month to the park, with each visitor receiving estimated benefits of $5 per visit, the benefit-cost ratio using PW, assuming a 6% annual interest rate, would be (Answer 4.02)
2. New buses for a mass-transit agency cost $10 million and are expected to last for 10 years with a $1 million salvage value. The buses cost $500,000 to operate and maintain each year. If the system is used for 763,578 trips per year, with the average cost to the rider of $1.50, but providing $4.00 in benefits, and the interest rate is 4% per year, the benefit-cost ratio using PW for the investment will be (Answer 1.16)
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