7-5. Solve Problem 7 - 4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $20,000 each year at location M and $17,000 each year at location N throughout the 20-year analysis period. 7-6. Solve Problem 7 - 4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $15,000 each year at M and $11,500 each year at N throughout the 20-year analysis period. 7 MEASURES INVOLVING COSTS, BENEFITS AND EFFECTIVENESS the two locations. Use an i* of 8% and a 20-year study period, and assume residual B/C ratio or ratios that you believe to be relevant for an economy study comparing values equal to 60% of first cost. (Ans. 1.49) 1-3. in example ment in CI as compared to NFC? What is the prospective rate of return on the extra investment in D & R as compared to CI? (Ans. 11.7%; negative) 7-4. A stretch of rural highway is to be relocated. Alternate new route locations are designated as M and N. The initial investment by government highway agen- cies will be $3,000,000 for M and $5,000,000 for N. Annual highway maintenance costs will be $120,000 for M and $90,000 for the shorter route N. Relevant annual road user costs are estimated as $880,000 for M and $660,000 for N. Compute the 149 7-5. Solve Problem 7 - 4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $20,000 each year at location M and $17,000 each year at location N throughout the 20-year analysis period. 7-6. Solve Problem 7 - 4 assuming that the stated road user costs are for the first year of service and that these costs will increase by $15,000 each year at M and $11,500 each year at N throughout the 20-year analysis period. 7 MEASURES INVOLVING COSTS, BENEFITS AND EFFECTIVENESS the two locations. Use an i* of 8% and a 20-year study period, and assume residual B/C ratio or ratios that you believe to be relevant for an economy study comparing values equal to 60% of first cost. (Ans. 1.49) 1-3. in example ment in CI as compared to NFC? What is the prospective rate of return on the extra investment in D & R as compared to CI? (Ans. 11.7%; negative) 7-4. A stretch of rural highway is to be relocated. Alternate new route locations are designated as M and N. The initial investment by government highway agen- cies will be $3,000,000 for M and $5,000,000 for N. Annual highway maintenance costs will be $120,000 for M and $90,000 for the shorter route N. Relevant annual road user costs are estimated as $880,000 for M and $660,000 for N. Compute the 149