5. One of the three traffic control improvement must be done. Conduct a B/C analysis and identify which one is favored. The improvement will be required for the foreseeable future. Use an interest rate of 6.50%. The current situation is estimated to have annual accident costs of 62,000. Option A B C Installed Cost 110,000 90,000 140,000 Annual Repair, operating cost 8,000 6,000 5,000 Estimated Annual Accident Cost Under Option 23,000 28,000 30,000 Estimated Annual Travel time cost increase 10,000 9,000 4,500 Life (yrs) 14 10 18

a. What is the annual accident reduction benefit from option B?

b. What is the B/C ratio of option C?

c. What is the B/C for the difference between option A and C?

d. Complete the analysis for all options and based on the analysis which option is the best public investment?