Question: A county road department wants to replace a signalized intersection with a roundabout to reduce the number of accidents. The number of fatal accidents

A county road department wants to replace a signalized intersection with a

A county road department wants to replace a signalized intersection with a roundabout to reduce the number of accidents. The number of fatal accidents would be reduced by 90% and the number of injury accidents would be reduced by 75%. The table below shows the current frequency of accidents at the intersection and the average cost per accident. The cost of land acquisition and construction would be $12,000,000 and it can be assumed that the roundabout will last indefinitely. Calculate the benefit-cost ratio using an interest rate of 4% per year. Accidents Accident Descriptor Cost per accident per year Fatal 0.1 $10,000,000 $200,000 Injury 9.0

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