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Highway Construction Proposal Cost To Benefit Ratio Calculation

Question

There are three proposals to improve access to National Highway # 11 from New Delhi to Kanpur, Uttar Pradesh state. The Financial data for the three Proposals (Including the monetary equivalents of perceives benefits and disbenefits) are listed in the Table below. The planning period is 20 years. Salvage values are Zero. The interested to be used in the analysis is X%.

 

Proposal 1

Proposal 2

Proposal 3

Construction Cost, $000

2600

3045

1890

Maintenance Cost, $000/yr

160

115

234

Reduced traffic policing cost, $000/yr

 

65

 

Improved traffic flow, $000.yr

110

45

39

Reduced noise pollution, $000/yr

 

90

21

Increased air pollution, $000/yr

55

75

 

Determine

(a) the benefits cost ratio for Proposal 3, if x = 3
(b) the maximum value of x that would make Proposal 1 still acceptable
(c) the preferred Proposal, if x = 2%

Summary

The question belongs to Civil Engineering and it discusses about calculating benefits cost ratio for three different proposals for building a highway and its yearly maintenance and other benefits. The calculations have been given clearly in the solution in detail.

Total Word Count 350

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