Basics of Engineering Economy 2nd Edition by Anthony Tarquin,Leland Blank

Exercise 8

The Hawaii Department of Transportation has planned a bypass loop that is expected to cost $9,000,000 and save motorists $820,000 per year in gasoline and other automobile-related expenses. However, local businesses will suffer sales losses estimated at $135,000 each year. ( a ) lculate the conventional B/C ratio using a discount rate of 6% per year and a 20-year study period. ( b ) the project economically justified if disbenefits are considered If disbenefits are not considered