Question: The two alternatives shown below are for projects to be considered to improve the traffic at a road intersection. Alternative Alternative First Cost $38,000 $87,000

The two alternatives shown below are for projects to be considered to improve the traffic at a road intersection.

Alternative

Alternative

First Cost

$38,000

$87,000

Annual M & O, $/year

$49,000

$64,000

Benefits, $/year

$110,000

$160,000

Dis-benefits, $/year

$26,000

-------

Using a B/C analysis, calculating at an interest rate of 7% per year and a 10 year study period, answer the following questions.

a. The B/C ratio for alternative A is [b]

b. The B/C ratio for alternative B is [a]

c. The incremental B/C analysis ratio is [f]

d. The best alternative to be chosen will be [c]

A)2.09, B)1.54, C)Alternative B, D)3.19 E)4.64 F)3.46>1 G)4.45>1 H)Alternative A

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