Determine the net benefit-cost of the project

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Reference no: EM133017041

The city council is conducting a cost-benefit analysis for a new bridge. The construction materials for the bridge will cost $80 million. The maintenance costs are estimated at $7 million per year. The hourly wage for construction workers on this project is $19.50 per hour. These workers could have earned $15.50 in other jobs in the community and will spend 0.5 million hours completing the project. The new bridge is expected to save two lives each year, and individuals estimate the value of a life at $9 million on average. It is also expected that the drivers will save approximately 225,000 hours of driving time each year. The after-tax return to a firm is 7%, and the firms tax rate is 50%.
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Determine the net benefit/cost of the project. Should the city council approve the project?

Reference no: EM133017041

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