C.1. An overpass and traffic interchange is proposed for a certain intersection. The traffic this year will average 10,0

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C 1 An Overpass And Traffic Interchange Is Proposed For A Certain Intersection The Traffic This Year Will Average 10 0 1 (30.59 KiB) Viewed 16 times

C.1. An overpass and traffic interchange is proposed for a certain intersection. The traffic this year will average 10,000 vehicles per day and is expected to increase at the rate of 10 percent per year. This growth rate is expected to continue for the next 20 years. The interchange is estimated to cost $2,000,000. Maintenance costs are estimated to be about the same with the interchange as without it. The savings in time, fuel, wear and tear, accidental property dam- age, and personal injury are expected to average about $0.02 per vehicle. Assume all savings accrue at EOY. The project can be financed at 7 percent interest on a loan and road bond money. Is the project justifiable on the basis of the information given? (Ans. Savings, P = $1,796,000)