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

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?