Renovations are expected to handle traffic adequately

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Reference no: EM131340161

A city is considering road improvements that will cost $1.5 million. The annual maintenance costs of these improvements will be $8,000, but users will save $50,000 per year due to reduced waiting time. In addition, accidents are expected to decline, representing a property and medical savings of $175,000 per year. The renovations are expected to handle traffic adequately for a period of 10 years. The city uses a MARR of 5%.

a) What is the BCR of the project?

b) What is the BCRM of the project?

c) Comment on whether the project should be done.

Reference no: EM131340161

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