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A new suburban development project is being planned to the west of Monterrey. Mexico. There is currently a two-lane road from the site of the

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A new suburban development project is being planned to the west of Monterrey. Mexico. There is currently a two-lane road from the site of the development along the base of the mountain Cerro de la Silla (Saddle Hill). The new development will require additional road capacity. Two alternatives are being considered. The first is to upgrade the existing road to four wide modern lanes. The second is to build a new four-lane highway east through Saddle Hill tunnel. The following data are avallable concerning the two routes: The planning period is 40 years for both routes. The MARR is 10 percent. Cars will travel at 100 kilometers per hour along either route. Operating cost for the cars is expected to be about 2.30 pesos per kilometer along either route. About 400,000 trips per year are expected on either route. Use this information to complete parts (a) through (d) below. a. Which route should be built? Use only the data given. Use annual worth to make your decision. The incremental benefit is million pesos per year, and the incremental cost is per year, so the route is preferable. (Round to two decimal places as needed.) b. What important benefit of the Saddle Hill tunnel route has been left out of the analysis? A. The value of an increase in safety B. The value of time saved for travelers C.The value of reduced vehicle operating costs D.The value of reduced disruption during the construction period c. Do you need more information to determine if the benefit that has been left out of the analysis from part (b) would change the recommendation? Explain. A. No additional information is needed since the planning period is given. B.Yes; a value to convert time to a monetary amount would be needed. C.Yes; a value to convert distance to a monetary amount would be needed. D.Yes; the amount of time for the construction period would be needed. E.No additional information is needed since car speed along the routes is given. F. No additional information is needed since the operation cost for cars is given.| d. How would the possibility of collecting a toll on the tunnel route affect your recommendation? A.A toll could possibly switch the recommendation. B.A toll would affect the analysis, but it would not affect the recommendation: C. A toll would reduce the incremental benefit only, so it would not affect the recommendation. D. The possiblity of collecting a toll would not affect the analysis at all

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