Finding benefit-cost ratios in the given situations

Reference no: EM132168020

Question: In Problem, assume that the right-of-way and roadbed have perpetual lives. What are the benefit/ cost ratios?

Problem: The right-of-way for a new highway will cost $1.5 million. The roadbed and earthworks will cost $3 million. The pavement will cost $2.5 million, and its life is 20 years. The discount rate is 9%, and the project has an assumed life of 20 years. The new highway will save travelers $750K worth of travel time each year. What is the benefit/cost ratio if the right-of-way cost is the disband fit to property owners? What is the benefit/cost ratio if the right-of-way cost is the price paid by government in eminent domain proceedings?

Reference no: EM132168020

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