Four competing and mutually exclusive ITS (i.e., Intelligent Transportation Systems) alternatives are being considered to mitigate congestion on the ChicagoMetro Area highway network. You have been asked to identify the best alternative based on an incremental B/C analysis, using the modified benefit/cost ratio. Data for each alternative is given in the table below. 

Remember that benefits are measured as the reduction in the costs to the users of the facility. All the values are in $1,000s. Which of the projects is the best alternative at an interest rate of 7%? 

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Capital Cost Annual Maintenance Annual User Costs ITS Estimated Alternatives Service Life Costs (Years) Existing 1 2,000 1,800 1,600 1,300 1,200 70 20 1,500 2,000 3,000 5,000 45 20 40 20 3 30 20 4 25 25 Capital Cost Annual Maintenance Annual User Costs ITS Estimated Alternatives Service Life Costs (Years) Existing 1 2,000 1,800 1,600 1,300 1,200 70 20 1,500 2,000 3,000 5,000 45 20 40 20 3 30 20 4 25 25

Answer rating: 100% (QA)

Step 1 Equivalent annual initial cost Given Data Rate of interest i 7 7100 007 Equivalent uniform annual cost EUAC of any cost represents the equal in... View the full answer