Engineering Economy 16th Edition by William Sullivan ,Elin Wicks, Koelling,

Exercise 3

A proposal has been made for improving the downtown area of a small town. The plan calls for banning vehicular traffic on the main street and turning this street into a pedestrian mall with tree plantings and other beautification features. This plan will involve actual costs of $6,000,000 and, according to its proponents, the plan will produce benefits and dis benefits to the town as follows:
a. Compute the B-C ratio of this plan based on a MARR of 10% per year and an infinite life for the project.
b. How does the B-C ratio change for a 20-year project life