Traffic and Highway Engineering
5th Edition
ISBN: 9781305156241
Author: Garber, Nicholas J.
Publisher: Cengage Learning
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Chapter 13, Problem 17P
To determine
The most cost-effective alternative based on equivalent annual cost by showing cash flow diagram.
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A secondary road in a developing country, 30 miles long, is to be improved by surface
treating the gravel surface without any change in length. The cost of the improvement is
estimated at $150,000 per mile. A present annual transport cost for all traffic on the
existing road (vehicle operating cost, maintenance cost, etc.) is estimated at $205,000
per mile. After improvement, this is expected to reduce to $170,000 per mile per annum.
Reconstruction takes place in two years with equal expenditures in each year. Assume
that in the second year of construction, transport cost on the improved road is
equivalent to present costs in half the length and new transport cost on the other half.
Would you undertake the project? (The minimum attractive rate of return (MARR) is
8.5% and the project life is 20 years after reconstruction.) Resealing would be required
10 years after reconstruction at a cost of $55,000 per mile. Use the net present worth
method
The Department of Traffic is considering three improvement plans for a heavily traveled road within the city. The road improvement is expected to achieve three goals: improve travel speeds, increase safety, and reduce operating expenses for motorists. The annual dollar value of savings compared with existing conditions for each criterion and additional construction and maintenance costs is shown in Table 1. If the economic life of the road is considered to be 53 years and the discount rate is 4%, which alternative should be selected? Evaluate the two proposals based on economic evaluation criteria using the Net Present Worth (NPW) and benefit-cost ratio (BCR) methods for economic analysis.
The Department of Traffic is considering three improvement plans for a heavily traveled intersection within the city. The intersection improvement is expected to achieve three goals: improve travel speeds, increase safety, and reduce operating expenses for motorists. The annual dollar value of savings compared with existing conditions for each criterion as well as additional construction and maintenancecosts is shown in the table below. If the economic life of the road is considered to be 60 years and the discount rate is 3.5%, which alternative should be selected? Solve the problem using the four methods for economic analysis.
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Traffic and Highway Engineering
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