The Peshawar Development Authority (PDA) is considering building its first tolled bypass around the city, that...
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The Peshawar Development Authority (PDA) is considering building its first tolled bypass around the city, that is assumed to have perpetual period of service. Two alternative routes are proposed. Evaluate both the alternatives using equivalent uniform annual worth analysis method at an interest rate of 7% for selecting economical location. Route No.1 The initial cost of the bypass is estimated to be $5.7 million. The installation of the tollbooth along the bypass is estimated to be about $1.3 million. The annual maintenance cost of the bypass is to be $85,000 each year while the annual maintenance cost of the tollbooth is to be $65,000 each year. Due to the construction of the bypass, it is expected to receive estimated tax savings of $225,000 per year. In addition, LDA has projected savings of $100,000 each year. Once the tollbooth is constructed, each car that passes through the toll is expected to pay a fare of $0.90. The city estimates that there will be a total of 500,000 cars using the bypass each year. Other relevant data is listed below. Resurfacing cost (every 7 years) 4% of bypass initial cost • houlder Grading/rework 90% of resurfacing cost Route No.2 The initial cost of the bypass (on route no.2) is estimated to be $6.5 million. The installation of the tollbooth along the bypass is estimated to be about $1.5 million. The annual maintenance cost of the bypass is to be $95,000 each year while the annual maintenance cost of the tollbooth is to be $78,000 each year. Due to the construction of the bypass, it is expected to receive estimated tax savings of $325,000 per year. In addition, LDA has projected savings of $150,000 each year. Each car that passes through the toll is expected to pay a fare of $1.30. The city estimates that there will be a total of 500,000 cars using the bypass each year. Other relevant data is listed below. • Resurfacing cost (every 7 years) 4.5% of bypass initial cost Shoulder Grading/rework 90% of resurfacing cost The Peshawar Development Authority (PDA) is considering building its first tolled bypass around the city, that is assumed to have perpetual period of service. Two alternative routes are proposed. Evaluate both the alternatives using equivalent uniform annual worth analysis method at an interest rate of 7% for selecting economical location. Route No.1 The initial cost of the bypass is estimated to be $5.7 million. The installation of the tollbooth along the bypass is estimated to be about $1.3 million. The annual maintenance cost of the bypass is to be $85,000 each year while the annual maintenance cost of the tollbooth is to be $65,000 each year. Due to the construction of the bypass, it is expected to receive estimated tax savings of $225,000 per year. In addition, LDA has projected savings of $100,000 each year. Once the tollbooth is constructed, each car that passes through the toll is expected to pay a fare of $0.90. The city estimates that there will be a total of 500,000 cars using the bypass each year. Other relevant data is listed below. Resurfacing cost (every 7 years) 4% of bypass initial cost • houlder Grading/rework 90% of resurfacing cost Route No.2 The initial cost of the bypass (on route no.2) is estimated to be $6.5 million. The installation of the tollbooth along the bypass is estimated to be about $1.5 million. The annual maintenance cost of the bypass is to be $95,000 each year while the annual maintenance cost of the tollbooth is to be $78,000 each year. Due to the construction of the bypass, it is expected to receive estimated tax savings of $325,000 per year. In addition, LDA has projected savings of $150,000 each year. Each car that passes through the toll is expected to pay a fare of $1.30. The city estimates that there will be a total of 500,000 cars using the bypass each year. Other relevant data is listed below. • Resurfacing cost (every 7 years) 4.5% of bypass initial cost Shoulder Grading/rework 90% of resurfacing cost
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loh reute t loo000 215000 775000 7so00 5006 75000 775000 775000 574 650... View the full answer
Related Book For
Cost Benefit Analysis Concepts and Practice
ISBN: 978-0137002696
4th edition
Authors: Anthony Boardman, David Greenberg, Aidan Vining, David Weimer
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