Travel cost savings were analyzed with a discounted annual estimation beginning with the first year. In 2014, the DPM had 2,150,068 annual trips. It could be estimated based off of current Qline usage that additional route availability with the extension into Metro Detroit would increase the usage by 50 percent (Neavling 2019). Which would increase the annual usage by 1,075,034 trips on the DPM yearly. Under the assumption the DPM would reduce travel time by ten percent due to higher service level along the Woodward avenue corridor, and an average commute time of 50 minutes, the hours saved would be 5,375,170. The minimum wage in Detroit, Michigan is $9.45 (Michigan.gov, 2020), the value of time saved would be equal to $50,795,357. The costs of daily parking and gas are equal to $18.27, multiplying that number by 50 percent of additional rides, due to roundtrips, annual parking and gas savings would be equal to $9,820,436. The total annual travel cost savings would be $60,615,793. Under the assumption that 5% of those living along Woodward Avenue would no longer need privately owned vehicle's, an estimate of $8,687,511 is made for initial vehicles' costs (AAA, 2020). If the extension of the DPM reduces the number of fatalities by 50 percent to 26 the safety benefits would equal $249,600,000 (Witsil, 2019). Finally, environmental savings would be $203,355, based off of calculations provided from the EPA (2020) emission simulator and an estimate of miles driven along the Woodward Avenue Corridor.

Are the below calculations correct? If not, what would be the correct NPV? Conduct a sensitivity analysis. What would happen if you changed the travel cost savings to 3%, 4%, 5%, 6%? What about the parking and gas savings?