A do-nothing and two mutually exclusive alter-natives are

Engineering Economic Analysis | 12th Edition | ISBN: 9780199339358 | Authors: Donald G Newnan

Problem 9-40 Chapter 9

Engineering Economic Analysis | 12th Edition

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Engineering Economic Analysis | 12th Edition | ISBN: 9780199339358 | Authors: Donald G Newnan

Engineering Economic Analysis | 12th Edition

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Problem 9-40

A do-nothing and two mutually exclusive alter-natives are being considered for reducing trafficcongestion. User benefits come from reduced con-gestion once the project is complete, while userdisbenefits are due to increased congestion duringconstruction. The interest rate is 9%, and the lifeof each alternative is 15 years. Which alternativeshould be chosen? User benefits ($M/yr)2.1 2.6User disbenefits ($M)1.2 2.1First cost ($M)6.9 9.9Operations and maintenance ($M/yr) 0.75 0.825(a)Use the benefitcost ratio.(b)Use the modified benefitcost ratio.(c)Use the public/government version of the B/Cratio.(d)Assume these numbers apply to a private firmand use a present worth index.(e)Are your recommendations for (a) through (d)consistent? Which measure gives the largestvalue? Why?

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Chapter 9, Problem 9-40 is Solved
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Textbook: Engineering Economic Analysis
Edition: 12
Author: Donald G Newnan
ISBN: 9780199339358

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