Toll lanes on a section of the l-40 freeway are being considered in order to reduce traffic congestion and travel times. Since this is a government project, the B-C ratio method must be applied in the evaluation. The following are cost and other estimates: Construction costs = $18,300,000 Operating and maintenance costs = 5630,000 per year Projected service life = 20 years Savings in travel times and revenues generated from the tolls = 53,608,000 in the first year of operation and projected to increase by 2.4% per year due to the projected annual increase in traffic. In addition, environmental analysis estimates that the project will result in increased noise and air pollution that will cause an additional societal health cost of $615,000 the first year and is also projected to increase at 2.4% per year. Assuming zero market (salvage) value at the end of 20 years and a MARR of 13% per year, should the toll lanes be constructed? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% per year. The conventional benefit-cost ratio of the project with PW is 1.1. (Round to two decimal places.) According to the B-C ratio method, the toll lanes should A. not be constructed B. be constructed More info N WN 1 2. 3 4 5 6 7 8 9 10 11 12 13 Discrete Compounding; i= 13% Single Payment Uniform Series Compound Compound Sinking Capital Amount Present Amount Present Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P FIP PIF FIA PIA AIF AIP 1.1300 0.8850 1.0000 0.8850 1.0000 1.1300 1.2769 0.7831 2.1300 1.6681 0.4695 0.5995 1.4429 0.6931 3.4069 2.3612 0.2935 0.4235 1.6305 0.6133 4.8498 2.9745 0.2062 0.3362 1.8424 0.5428 6.4803 3.5172 0.1543 0.2843 2.0820 0.4803 8.3227 3.9975 0.1202 0.2502 2.3526 0.4251 10.4047 4.4226 0.0961 0.2261 2.6584 0.3762 12.7573 4.7988 0.0784 0.2084 3.0040 0.3329 15.4157 5.1317 0.0649 0.1949 3.3946 0.2946 18.4197 5.4262 0.0543 0.1843 3.8359 0.2607 21.8143 5.6869 0.0458 0.1758 4.3345 0.2307 25.6502 5.9176 0.0390 0.1690 4.8980 0.2042 29.9847 6.1218 0.0334 0.1634 5.5348 0.1807 34.8827 6.3025 0.0287 0.1587 62543 1599 40 4175 64624 00247 1547 OOO OO 14 15 Which of the following are some of the reasons that make economic evaluation of public projects more challenging than private projects? Select all that apply. A. They typically have only one goal that they have to achieve | B. They are sometimes motivated by political rather than economic goals C. They are typically projects with short service lives D. They are subject to higher values of MARR | E. They may be subject to conflicting impacts and viewpoints for different members of society E. Their evaluation may involve balancing between those who "gain" from the project and those who loose G. They are often subject to societal benefits and impacts that are hard to quantify
