MDOT recently widened I-55 from Miss. 302 in Southaven to Commerce Street in Hernando to relieve traffiC congestion. The construction cost was $164 million. Annual maintenance is estimated at $1.25 million and every 10 years, the pavement surface will have to be milled off and replaced at an estimated cost of $12 million. This project is expected to save drivers approximately $60,000 per day in lost wages by alleviating travel delays. What is the benefit-cost ratio for this project if the life is assumed to be infinite and MDÓT's cost of capital is 3% per year?

MDOT recently widened I-55 from Miss. 302 in Southaven to Commerce Street in Hernando to relieve traffiC congestion. The construction cost was $164 million. Annual maintenance is estimated at $1.25 million and every 10 years, the pavement surface will have to be milled off and replaced at an estimated cost of $12 million. This project is expected to save drivers approximately $60,000 per day in lost wages by alleviating travel delays. What is the benefit-cost ratio for this project if the life is assumed to be infinite and MDÓT's cost of capital is 3% per year?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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