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Road Improvement Proposal With Benefit To Cost Ratio Calculation

Question
There are two Alternative proposals to improve traffic flow in Downtown Bangalore, India. Costs and monetary equivalents of benefits and dis‐benefits are listed in the Table below. The planning period is n years. Salvage values are zero. The interest rate is X%.

 

Alternative #1

Alternative #2

Initial road construction cost

$29,800,000

$11,000,000

Road maintenance cost/year

$350,000

$210,000

Improved traffic flow/year

$1,200,000

$750,000

Reduced noise pollution/year

$300,000

$ 0

Improved road safety/year

$460,000

$190,000

Reduced traffic policing cost/year  

$120,000

$ 0

Increased air pollution/year

$55,000

$120,000

Reduced car idling time/year

$85,000

$ 0


(a) the benefit cost ratio for Alternative 2, if n = 30 and x = 3
(b) the minimum value of n that would make Proposal acceptable if x = 2%
(c) the preferred Alternative, if n = 28 and x=3%

Summary

The question belongs to Civil Engineering and it discusses about proposals for reducing traffic in Bangalore city. The cost and monetary benefits have been given. The benefit to cost ratio for the two proposals, the minimum value for the proposals as well as the preferred alternative have been calculated in the solution.

Total Word Count 350

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