A department of transportation is considering widening lanes on major highways from 6 m to 7.5 m. The objective is to reduce the accident rate. Accidents have both material and human costs. Data for the highway section are found below.

a) Compute the present worth of costs of lane-widening.

b) Compute the present worth of savings of non-human accident costs.

c) Compute the present worth of the savings of serious personal injury

d) What is the BCR of the project?

Item Data Accidents per 100 000 000 vehicle-kilometers in 6 m lanes 150 Accidents per 100 000 000 vehicle-kilometers in 7.5 m lanes 90 Serious personal injuries per accident 10% Average non-human cost per accident ($) 2500 Average cost of personal injuries per accident ($) 40 000 Annual road use (vehicles) 7 500 000 First cost per kilometer ($) 175 000 Operating and maintenance costs per kilometer/year ($) 7 500 Project life (years) 25 MARR 10%