Question
In: Economics
Given Choosing between two proposed traffic safety project intersection of a high crash rate intersection. Two...
Given
Choosing between two proposed traffic safety project intersection of a high crash rate intersection. Two solutions are proposed.
Project A: build a 5.57 million dollars overpass to separate the two roadways. The estimated value of the crash avoided will be 513000 per year over the next 20 years.
Project B: improve the geometry and signal timing at the intersection at a cost of 418000 dollars. The estimated value of the crash avoided will be 61800 dollars per year over the next 20 years.
Required:
A- What is the percent worth benefits and costs (PWB and PWC) for each project? Show cash flow diagrams and calculations. The current interest rate is 5.4% per year.
B- Using Net Present Worth NPW which project is better?
C-Using the benefit cost ratio BCR which project is better?
Solutions
Rahul Sunny answered 1 month agoRelated Solutions
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You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$52
$27
$19
$22
$17
B
−$100
$22
$41
$48
$61
a. What are the IRRs of the two projects?
b. If your discount rate is 5.4%, what are the NPVs of the two
projects?
c. Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$52
$27
$19
$18
$17
B
−$101
$19
$40
$51
$58
a. What are the IRRs of the two projects?
b. If your discount rate is 5.4%, what are the NPVs of the two
projects?
c. Why do IRR and NPV rank the two projects differently?
a. What...
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
-$ 49
$ 24
$ 19
$ 20
$ 13
B
-$ 100
$ 18
$ 39
$ 48
$ 59
a. What are the IRRs of the two projects?
b. If your discount rate is
5.5 %
what are the
NPVs
of the two projects?
c. Why...
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
-$48
$27
$ 21
$ 19
$ 12
B
−$98
$20
$ 41
$ 51
$ 59
a. What are the IRRs of the two projects? (Round to one
decimal place.)
b. If your discount rate is 4.7% what are the NPVs of the two
projects?
c. Why...
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$51
$24
$18
$21
$17
B
−$102
$21
$38
$49
$61
a. What are the IRRs of the two projects?
b. If your discount rate is
5.1%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$51
$26
$20
$18
$13
B
−$101
$22
$39
$49
$58
a. What are the IRRs of the two projects?
b. If your discount rate is
5.4%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
a. What...
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
−$51
$26
$18
$19
$16
B
−$100
$20
$41
$51
$60
a. What are the IRRs of the two projects?
b. If your discount rate is
5.4%,
what are the
NPVs
of the two projects?
c. Why do IRR and NPV rank the two projects differently?
a. What...
You are choosing between two projects. The cash flows for the projects are given in the...
You are choosing between two projects. The cash flows for the
projects are given in the following table ($ million):
Project
Year 0
Year 1
Year 2
Year 3
Year 4
A
-$52
$24
$20
$21
$17
B
-$100
$18
$38
$51
$60
a. What are the IRRs of the two projects? The IRR for project A
is_______%. (Round to one decimal place.)
b. If your discount rate is 4.9%, what are the NPVs of the two
projects?______.
c. Why...
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