Three transportation projects have been proposed to increase the safety in andaround a residential neighborhood. Each project consists of upgrading existing streetsigning to highly retro reflective sheeting to increase visibility. The following tableshows the initial construction costs, annual operating costs, useful life of the sheeting,and the salvage values for cach alternative. Assume that the discount rate is 10%. Cal-culate the present worth for each alternative and determine the preferred projectbased on the economic criteria,AnntualInitialConstructionOperatingCosts (S)Useful Life(Years)SalvageValue (S)AlternativeCosts (S)1,125105,0008,00010,00012,000123,5001,6002,250II5.1,300IIIDraw cash flow diagram.NPW| Select INPW[ Select )NPW- Select| Select )Preferred Alternative

We are going to find the NPWs for each alternative to answer this question.

Three transportation projects have been proposed to increase the safety in and around a residential neighborhood. Each project consists of upgrading existing street signing to highly retro reflective sheeting to increase visibility. The following table shows the initial construction costs, annual operating costs, useful life of the sheeting, and the salvage values for each alternative. Assume that the discount rate is 10%. Cal- culate the present worth for each alternative and determine the preferred project based on the economic criteria. Initial Annual Construction Costs (S) Operating Costs (S) Useful Life (Years) Salvage Value (S) Alternative 8,000 1,125 10 5,000 1,600 2,250 3,500 1,300 12 II 10,000 III 5. 12,000 Draw cash flow diagram. | Select ] NPW, NPW (Select NPWa- I Select |Select) Preferred Alternative

Three transportation projects have been proposed to increase the safety in and around a residential neighborhood. Each project consists of upgrading existing street signing to highly retro reflective sheeting to increase visibility. The following table shows the initial construction costs, annual operating costs, useful life of the sheeting, and the salvage values for each alternative. Assume that the discount rate is 10%. Cal- culate the present worth for each alternative and determine the preferred project based on the economic criteria. Initial Annual Construction Costs (S) Operating Costs (S) Useful Life (Years) Salvage Value (S) Alternative 8,000 1,125 10 5,000 1,600 2,250 3,500 1,300 12 II 10,000 III 5. 12,000 Draw cash flow diagram. | Select ] NPW, NPW (Select NPWa- I Select |Select) Preferred Alternative

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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