Chapter 9 11. (10 points; 9-41) A "do-nothing" and two mutually exclusive althernatives are being considered for reducing traffic congestion. User benefits come from reduced congestion once the project is complete, while user disbenefits are due to increased congestion during construction. The interest rate is 8%, and the life of each alternative is 15 years. Which alternative should be chosen? User benefits ($M/yr) User disbenefits ($M) First cost ($M) Operations and maintenance cost ($M/yr) Alternative A 2.1 1.2 6.9 0.75 Alternative B 2.6 2.1 9.9 0.825 a) Use a benefit-cost ratio. b) Use the modified benefit-cost ratio c) Use the public/government version of the benefit-cost ratio d) Assume these numbers apply to a private firm and use a present worth index. e) Are your recommendations for a-d consistent? Which measure gives the largest value? Why? Chapter 9 11. (10 points; 9-41) A "do-nothing" and two mutually exclusive althernatives are being considered for reducing traffic congestion. User benefits come from reduced congestion once the project is complete, while user disbenefits are due to increased congestion during construction. The interest rate is 8%, and the life of each alternative is 15 years. Which alternative should be chosen? User benefits ($M/yr) User disbenefits ($M) First cost ($M) Operations and maintenance cost ($M/yr) Alternative A 2.1 1.2 6.9 0.75 Alternative B 2.6 2.1 9.9 0.825 a) Use a benefit-cost ratio. b) Use the modified benefit-cost ratio c) Use the public/government version of the benefit-cost ratio d) Assume these numbers apply to a private firm and use a present worth index. e) Are your recommendations for a-d consistent? Which measure gives the largest value? Why