Traffic congestion on RB has reached a point where something must be done. Two suggested plans have a life of 15 years, because that is the scheduled time for completion of the new highway. After that time traffic will fall well bellow current levels.

Adding right turn lanes at key intersections will cost $8.9m with annual maintenance costs for signals and lane painting of $150,000. added congestion during construction is a disbenefit of $900,000, but the reduced congestion after construction is an annual benefit of $1.6m. This benefit actually starts lower and increases over time, but for a simple initial analysis we re assuming a uniform annual benefit.

Adding a second left turn lane at a few key intersections will cost an additional $3m. With an added annual maintenance cost of $75000. this construction is more disruptive, and the total disbenefit for congestion during construction is $2.1m. Upon completion, the total benefit for reduced congestion will be $2.2 annually.

Which alternative is preferred if the interest rate is 10%. Analyze using a government B/C ratio.