A city is considering road improvements that will cost $1.5 million. The annual maintenance costs of these improvements will be $8,000, but users will save $50,000 per year due to reduced waiting time. In addition, accidents are expected to decline, representing a property and medical savings of $175,000 per year. The renovations are expected to handle traffic adequately for a period of 10 years. The city uses a MARR of 5%.
a) What is the BCR of the project?
b) What is the BCRM of the project?
c) Comment on whether the project should be done.