An analysis of accidents in a rural state indicates that widening a highway from 30 ft to 40 ft will decrease the annual accident rate from 1,250 to 710 per million vehicle-miles. Calculate the average daily number of vehicles that should use the highway to justify widening on the basis of the following estimates: (i) the average loss per accident is $1,200; (ii) the cost of widening is $117,000 per mile; (iii) the useful life of the widened road is 25 years; (iv) annual maintenance costs are 3% of the capital investment; and (v) MARR is 12% per year.
(a) 78
(b) 63
(c) 34
(d) 59
(e) 27
Neither machine has a market value at the end of seven years, and MARR is 12% per year. Select the closest answer