7-5. Solve Problem 7-4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $20,000 each year at location M and $17,000 each year at location N throughout the 20-year analysis period. 7-6. Solve Problem 7-4 assuming that the stated road user costs are for the first $11,500 each year at N throughout the 20-year analysis period. of service and that these costs will increase by $15,000 each year at M and year 7 MEASURES INVOLVING COSTS, BENEFITS AND EFFECTIVENESS the two locations. Use an i* of 8% and a 20-year study period, and assume residual B/C ratio or ratios that you believe to be relevant for an economy study comparing values equal to 60% of first cost. (Ans. 1.49) 7-4. A stretch of rural highway is to be relocated. Alternate new route locations are designated as M and N. The initial investment by government highway agen- cies will be $3,000,000 for M and $5,000,000 for N. Annual highway maintenance costs will be $120,000 for M and $90,000 for the shorter route N. Relevant annual road user costs are estimated as $880,000 for M and $660,000 for N. Compute the 149 n...117 Pls see calculations below. Route N should be chosen since it has a lower PV of cost. Project Route Location M Project Route Location N Cost/(1.08 A Time) Road Roaci User Discounted Investment/ Annual User Time Investment/Salvage Annual Maintenance Costs Total Cost Cost Salvage Maintenance Costs 0 -30,00,000 -30,00,000-30,00,000 -50,00,000 Cost/(1.08 Time) Total Cost -50,00,000 Discounted Cost -50,00,000 - 1.20,000 -8,80,000 -10,00.000 -9,25.926 -90.000 -6,60,000 -7,50,000 -6,94,444 2 -1,20,000 -8,80,000 -10,00,000 -8,57,339 -90,000 -6,60,000 -7,50,000 -6,43,004 3 -1,20.000 -8.80,000 -10,00.000 -7,93,832 -90,000 -6,60,000 -7,50.000 -5.95,374 4 -1.20,000 -8,80,000 -10,00,000 -7,35.030 -90,000 -6,60,000 -7,50,000 -5,51,272 5 -1,20,000 -8,80,000 -10,00,000 -6,80,583 -90,000 -6,60,000 -7,50,000 -5,10,437 6 - 1.20,000 -8.80,000 -10,00,000 -6,30,170 -90,000 -6,60,000 - 7,50.000 -4,72,627 7 - 1.20,000 -8,80,0001 -10,00.000 -5.83.490 -90,000 -6,60,000 -7,50,000 -4,37,618 8 -1,20,000 -8,80,000 -10,00,000 -5,40,269 -90,000 -6,60,000 -7,50,000 -4,05,202 9 -1.20.000 -8,80,000 -10,00,000 -5,00,249 -90,000 -6,60,000 -7,50,000 -3.75,187 10 -1.20,000 -8,80,000 -10,00,000 -4,63,193 -90,000 -6,60,000 -7,50,000 -3,47,395 11 - 1.20,000 -8,80,000 -10,00,000 -4.28,883 -90,000 -6,60,000 -7,50,000 -3.21,662 12 -1,20,000 -8,80,000 -10,00,000 -3,97,114 -90,000 -6,60,000 - 7,50,000 -2,97,835 13 -1,20,000 -8.80,000 -10,00,000 -3,67,698 -90,000 -6,60,000 -7.50,000 -2.75,773 14 - 1.20,000 -8,80,000 -10,00,000 -3,40,461 -90,000 -6,60,000 -7,50,000 -2,55,346 15 -1,20,000 -8,80,000 -10,00,000 -3,15,242 -90,000 -6,60,000 -7.50,000 -2,36,431 16 -1,20,000 -8,80,000 .90,000 -6,60,000 -7,50,000 -2,18,918 10,00,000 -2,91,890 - 10,00,000 -2,70,269 17 -1,20,000 -8,80,000 -90,000 -6,60,000 - 7,50,000 -2,02,702 18 -1,20,000 -8,80,000 -10,00,000 -2,50,249 -90,000 -6,60,000 -7,50,000 -1,87,687 19 -1,20,000 -8,80,000 -10,00,000 -2,31.712 -90,000 -6,60,000 -7.50,000 -1,73,784 18,00,000 -1,20,000 -8,80,000 30,00,000 -90,000 -6,60,000 22,50.0001 20 Total 8,00,000 1,71,639 -1,24,31,961 4,82,733 - 1,17,19,966 7-5. Solve Problem 7-4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $20,000 each year at location M and $17,000 each year at location N throughout the 20-year analysis period. 7-6. Solve Problem 7-4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $15,000 each year at M and $11,500 each year at N throughout the 20-year analysis period