Assignment No.

The Department of Traffic is considering three improvement plans for a heavily traveled intersection
within the city. The intersection improvement is expected to achieve three goals: improve travel speeds,
increase safety, and reduce operating expenses for motorists. The annual dollar value of savings compared
with existing conditions for each criterion as well as additional construction and maintenance costs is
shown in Table 13.4. If the economic life of the road is considered to be 50 years and the discount rate is
3%, which alternative should be selected? Solve the problem using the four methods for economic
analysis.

Solution:

1. Compute the NPW of each project.

2. Solve by the EUAW method.

3. Solve by the BCR method.

4. Solve by the ROR method.