UNIVERSITY OF DAR ES SALAAM

COLLEGE OF ENGINEERING AND TECHNOLOGY (CoET)

DEPARTMENT OF STRUCTURAL AND CONSTRUCTION ENGINEERING (SCE)

SC431: ENGINEERING ECONOMICS AND PLANNING TECHNIQUES
ASSIGNMENT
Name: MAPUNDA, JAMES
Reg. No. 2013-04-02195

Lecturer in charge: Mr.Mahundi

Submission date: 06th January 2017

i) Accident savings computations

Accident savingcost =( Accident rate on existing roadaccident rate on proposed road ) predicted flows Avera
But, Average accident cost=TShs 7,500,000/=

( Accident rate on existing roadaccident rate on proposed road ) =(0.750.25) 106=0.5 10 6 Vehkm
Year

6
Flow( 10

vehkm/year)

Saved amount
due to
accident(Tshs)

0
2
3
200
750,000,000
4
210
787,500,000
5
220
825,000,000
6
230
862,500,000
7
240
900,000,000
8
250
937,500,000
9
260
975,000,000
10
270
1,012,500,000
11
280
1,050,000,000
12
290
1,087,500,000
13
300
1,125,000,000
14
310
1,162,500,000
Table 1.Saved amount due to accident
ii) Operating saving computation.
2+
Average Vehicle Saving Cost =(

25
+(0.00001V 2 )
V
) Tshs per Veh-Km
100

Where V-Is the velocity if the vehicle.

2+
Average Vehicle Saving Cost (Existing )=(

25
2
+( 0.0000145 )
45
) =0.025758Tshs per Veh-Km
100

2+
Average Vehicle Saving Cost (Proposed)=(

25
+(0.00001 852)
85
) =0.0236637Tshs per Veh100

Km
3
Difference=0.025758-0.023663= 2.0943 10
Tshs per Veh-Km

ii) Vehicle operating cost saving=DifferenceAOVC Flow

whereas AOVC=Average Vehicle Operating Cost
Year

Flow( 10

vehkm/year)

Vehicle operating
cost saving
(Tshs)/year

0
2
3
200
418,860
4
210
439,803
5
220
460,746
6
230
481,689
7
240
502,632
8
250
523,575
9
260
544,518
10
270
565,461
11
280
586,404
12
290
607,347
13
300
628,290
14
310
649,230
Table 2.Vehicle Operating Saving amount
iii) Journey time saving calculations.
Required to find the time spent by the vehicle to move 1Km in the existing road and in the
proposed road
Time=

Distance hr
(
km)
Velocity veh

1
Time spent by the vehicle in existing road= 45 hr/veh-Km

1
Time spent by the vehicle in a proposed road= 85 hr/veh-Km
Time difference existing proposed road=

1
1
=0.010457516 hr / vehKm
45 85

Journey time saving=Time difference vehicle flow Average cost of vehicle time saving

Flow(( 10

year

veh-

km/year

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14

Saved Cost due to

journey time
saving(Tshs)

200
210
220
230
240
250
260
270
280
290
300
310

3,660,125,000
3,843,131,250
4,026,137,500
4,209,143,750
4,392,150,000
4,575,156,250
4,758,162,500
4,941,125,000
5,124,175,000
5,307,190,000
5,490,187,500
5,673,193,750

Table 3.Journey time saving amount

iv) Discounting costs and benefits

Discounting rate=8%
Required to find P given F.The factor (P/F, i, n) is obtained from the interest tables.
a) Cash Flow Diagram for both construction costs and maintenance costs.

10

11

12

13

14

10000
10

5000

250

250 250 250 250 250 250 250

250

250

250

250

Present worth=F (P/F, i, n)

b) Cash flow diagram for total benefits.

Total benefits=Accident saving +Operating saving+ Journey time saving
0

10

10

11

12

13

14

4.41 4.63 4.85 5.07 5.29 5.51 5.73 5.93 6.17

6.40

6.62

6.84

Present worth=F (P/F, i, n)

The table shows the discounted costs and benefits.

Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14

cost of
construction/maintenan
ce(Tshs)
10,000,000,000
5,000,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000
250,000,000

discounted
cost(Tshs)

Total
benefit(Tshs)

discounted
benefit(Tshs)

9,259,000,000
4,286,500,000
198,450,000
183,750,000
170,150,000
157,550,000
145,875,000
135,075,000
125,050,000
115,800,000
107,225,000
99,275,000
91,925,000
85,125,000

4,410,500,000
4,631,071,053
4,851,598,200
5,072,125,400
5,292,652,000
5,513,180,000
5,733,707,000
5,954,190,000
6,174,761,000
6,395,297,000
6,615,816,000
6,836,343,000

3,501,055,000
3,403,837,000
3,301,998,000
3,196,453,000
3,088,262,000
2,978,771,000
2,868,000,000
2,757,981,000
2,648,354,000
2,539,572,000
2,432,636,000
2,327,775,000

Total

15,160,750,00
0

35,029,530,000

V) Net Present Value (NPV)

Net Present Value=Present discounted benefitsPresent discounted costs
=35,029,530,000-15,160,750,000
=Tshs 19,868,780,000/=
The Net Present Value (NPV) is Tshs 19,868,780,000/=
Vi) Benefit/Cost Ratio(B/C) computations
Benefit Cost Ratio=

Present value benefit

Present value cost
35,029,530,000
=2.3105
= 15,160,750,000

The Benefit Cost Ratio is 2.3105

Vii) Internal Rate of Return (IRR) Computations
The IRR method is a means of arriving at a rate of interest that will discount all future
cash flows associated with the investment, both negative and positive into equality with
the initial investment. (Discount all future cash flows into PW).