This preview shows page 1. Sign up to view the full content.
Unformatted text preview: $2,734,270 $3,435,847 Annual Maintenance Costs (/km) $25,000 $25,000 $25,000 $25,000 You will need the following information: Current traffic volumes/day 3,000 Vehicle mix: 80% cars, 20% trucks. Projected increase in traffic 3% per annum (i.e., compound) Planning horizon 5 years (i.e., 3000 vehicles in year 0, (3000)*(1.03) 1 in year 1 (3000)*(1.03) 5 in year 5. Accidents before bypass 6/year Accidents after bypass 1/year Discount rate of 4% USER COSTS Travel Costs Cars $13.8/hour Trucks $16.7/hour Operating Costs Cars $0.14/km Trucks $0.50/km Accident Costs/accident $100,000/accident Hints Calculate the NPV costs for the No-build and each option. Realise you need to calculate the ANNUAL user costs and benefits. You need to subtract the user costs for Option 1 from the user costs for No-build and then compute the NPV of the net benefits. Repeat for other two options ....
View Full Document
- Three '10