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Please I need help with my problem ASAP! 1. A state highway agency is evaluating the construction of a bypass around a small city with
Please I need help with my problem ASAP!
1. A state highway agency is evaluating the construction of a bypass around a small city with lots of traffic congestion. The road will cost $42,000,000 to construct and will have to be resurfaced every 10 years at a cost of $4,500,000. Based on current traffic projections, 500,000 travelers per year will save an average of 15 minutes each going from one side of the city to the other. If the average cost to these travelers is $30 per hour of delay, is this project justified? Perform a benefit-cost analysis assuming the state's cost of capital is 5% per year and the useful life of the road is 30 yearsStep by Step Solution
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