A 35 million road widening project over a 10-mile stretch


A $3.5 million road widening project over a 10-mile stretch is proposed. The project will induce 25 percent of traffic increase with an existing AADT of 20,000 in the 3-hour peak period after widening. Use 250 as the number of days per year having peak period traffic. The average speed of the existing traffic will increase from 40 mph to 55 mph. Energy use will go from average of 28 to 23 mpg. The annual average maintenance cost is $125,000. If time value is $15 per hour and gasoline costs $3.5 per gallon. Use a service life of 30 years and a discount rate of 4%, calculate the project’s net present worth, benefit-to-cost ratio, and equivalent uniform annual benefits.

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Financial Management: A 35 million road widening project over a 10-mile stretch
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