Cost benefit analysis on proposed project

Assignment Help Finance Basics

Reference no: EM1310744

Q1) City of Chicago is considering a railroad track improvement project which is expected to give benefits in form of time savings associated with more immediate transport of people through region. Additionally, project will comprise many railroad grade crossing improvements which are expected to save lives. Cost of materials for project is expected to be= $150 million. Average cost of labour for construction of road is= $20 per hour for 1,000,000 hours of total labour. City will require operating and sustaining railroad that will cost it= $2 million per year. This O&M cost will be flat over a 5 year period. Railroad track project is expected to save sixteen lives per year. On average, people are expected to accrue $2 million in earnings over their life span. By improving railroad track system, it is expected to put aside 15 minutes on average per trip. It is expected that there will be 1,000,000 trips on roads affected by project per year with average salary of= $50,000 per driver based on 2,000 work hours per year. This wage rate is expected to be flat over 5 year period. Suppose a discount rate of 5%, do a cost benefit analysis on this proposed project over a five year period giving a recommendation and numerical explanation for your recommendation.

Reference no: EM1310744

Questions Cloud

Computation of amount to be invested each year : Computation of Amount to be invested each year for a target future value and Net Present Value of alternate investment options.

Researcher of degree of tastiness : Participants indicate the degree of tastiness on a 10 point scale and the ratings appear in the given table. Tastiness scores tend to be skewed.

Prepare a bank reconciliation statement : Preparation of Bank Reconciliation Statement given the items and entries affecting the respective balances and Using the information below, prepare a bank reconciliation statement

Function to input the 20 integers in the range of 1 to 6. : In C Write down the main function in order to input the 20 integers in range of 1 to 6. Write down a function in order to count number of times the numbers 2 and 5 occur.

Cost benefit analysis on proposed project : Suppose a discount rate of 5%, do a cost benefit analysis on this proposed project over a five year period giving a recommendation and numerical explanation for your recommendation.

Effective way to improve your problem-solving skills : The most efficient way to enhance your problem-solving skills, to be an effective leader, is with practice!

Taxes in government accounting and operations : Types of Funds and taxes in government accounting and operations.

Computation of value of a bond using several required rate : Computation of Value of a Bond using various required rate of return using coupon rate maturing in 20 years for an investor whose required rate of return

Detecting hidden files on suspect drive with forensics tools : What procedures are used by the suspect in order to hide the files on suspect drive, or formatted media and how does computer forensics investigator examine the hidden, password protected or the encrypted files with forensics tools?

User Account

All Pages