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A municipality has just spent $8 million to build a second bridge across the city river to handle the increased traffic between the banks. City engineer calculated that the bridge allows to reduce travel time for the road users by $15.5 million over the 25-year period of the service life of the bridge calculated in terms of today's dollars. The construction also leads to a decrease in the value of surrounding property by $6.4 million over the service life in terms of today's dollars. The bridge requires $3.5 million for operation and maintenance over its service life in terms of today's dollars. What is the benefit-cost ratio of the project?
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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