1. What are the three steps in Benefit-Cost Analysis? (Identify, Classify, Evaluate in terms of today's dollars)
2. Do any errors in the misclassification of benefits or costs in exhibit 2 seriously bias the overall outcomes of the Benefit-Cost Analysis for the Alternatives Considered?

181 The West Side Highway Proposal (Abridged Revised EXHIBIT 2. West Side Highway Proposal Coest and Benefits That Are Estimated in Dollars (Millions of Dollars) Maintenance. Reconstruction Arterial (w/Rallwey! Inboard (w/Busway! Outboard w/Busway) Modified Outboard 125 159 92 123 101 119 163 157 106 144 138 146 162 209 191 200 149 165 183 158 107 112 52 50 1415 1356 B9.5 86.5 . 69.2 O 76 - 76 (A) Consiruction and right of way costs (federal, state and chy) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Yoar 7 Your B Yoar 9 Year 10 Yoar 11 Year 12 Total: (B) Annual user savings in 1995 IC) Annual land valuta gain in 1995 (D) Replonal income gains fone time, during construction 75 . (EJ City expendituros avoided one time) Undiscounted totals, 40 year-life Construction cost -227 User savings 1048 Property tax Regional Income -195 270 City expenditures 1016 531 Discounted totals (prefent values), 40 yearlfe, 10 percont discount rate por your Construction cost -56.8 -128.1 -169.1 User savings 0.0 74.2 48.7 Property tax .0.0 0.0 0.0 Regional.incomo 110.6 166.3 City expenditures 0.0 0.0 0.0 -0.7 56.2 B/C ratio 0.89 1.44 1.14 950 855 61.5 . 61.5 -76 -307 568 -1111 3580 o -- 1415 3460 3040 1200 -1356 2768 3040 855 860. nditures : D 62. 62 3419 5347 5369 -608.7 306.8 0.0 698.3 -877.9 296.5 280.5 744.5 38.2 461.7 56.1 . -841.3 237.2 260.5 530.5 38.2 225.0 1.27 0.0 25.9 205.4 1.29 1,53 181 The West Side Highway Proposal (Abridged Revised EXHIBIT 2. West Side Highway Proposal Coest and Benefits That Are Estimated in Dollars (Millions of Dollars) Maintenance. Reconstruction Arterial (w/Rallwey! Inboard (w/Busway! Outboard w/Busway) Modified Outboard 125 159 92 123 101 119 163 157 106 144 138 146 162 209 191 200 149 165 183 158 107 112 52 50 1415 1356 B9.5 86.5 . 69.2 O 76 - 76 (A) Consiruction and right of way costs (federal, state and chy) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Yoar 7 Your B Yoar 9 Year 10 Yoar 11 Year 12 Total: (B) Annual user savings in 1995 IC) Annual land valuta gain in 1995 (D) Replonal income gains fone time, during construction 75 . (EJ City expendituros avoided one time) Undiscounted totals, 40 year-life Construction cost -227 User savings 1048 Property tax Regional Income -195 270 City expenditures 1016 531 Discounted totals (prefent values), 40 yearlfe, 10 percont discount rate por your Construction cost -56.8 -128.1 -169.1 User savings 0.0 74.2 48.7 Property tax .0.0 0.0 0.0 Regional.incomo 110.6 166.3 City expenditures 0.0 0.0 0.0 -0.7 56.2 B/C ratio 0.89 1.44 1.14 950 855 61.5 . 61.5 -76 -307 568 -1111 3580 o -- 1415 3460 3040 1200 -1356 2768 3040 855 860. nditures : D 62. 62 3419 5347 5369 -608.7 306.8 0.0 698.3 -877.9 296.5 280.5 744.5 38.2 461.7 56.1 . -841.3 237.2 260.5 530.5 38.2 225.0 1.27 0.0 25.9 205.4 1.29 1,53