Question

1.Capital cost of a rural highway is $10million. This...

1.Capital cost of a rural highway is $10million. This project will shorten the road by 2km and reduce journey times by an average of 5 minutes each. This project is also expected to reduce traffic accidents by an average of 5 per year and to reduce annual maintenance costs by $5,000. Average daily traffic on this road is currently 7,000 persons, with a load factor of 1.5persons per vehicle. Traffic is expected to increase linearly by 10% over the 20 year life of the project. If the vehicle operating costs are $0.10/km, travelers value their time at $3.00/h, and the average cost of a traffic accidents is $20,000, what is the benefit cost ratio if the interest rate is assumed to be 8%? Comment on the results.

2.A bus system needs to be set up between two locations, a distance of 12km. The operating time is 24 minutes. It has been estimated that the off-peak demand is 10,000 passengers/hr and a 840-seater buses are available, which can safely have a load factor of 0.8. Design the basic system and determine the fleet size, assuming that the policy headway is 5 minutes and the minimum terminal time is 6.0 minutes, which can be revised if necessary.