SITUATION 5 EVALUATING TRANSPORTATION ALTERNATIVES USING ECONOMIC ALTERNATIVE МЕТHODS: The Department of Traffic is considering three improvement plans for a heavily traveled intersection within the...

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Extracted text: SITUATION 5 EVALUATING TRANSPORTATION ALTERNATIVES USING ECONOMIC ALTERNATIVE МЕТHODS: 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 the table below. If the economic life of the road is considered to be 65 years and the discount rate is 3.5%, which alternative should be selected? Annual Saving in Accidents, $ Benefits, $ Annual Travel Annual Time Annual Additional Maintenance Cost, $ Construction Cost, $ Operating Savings, $ Alternative 215,000 5,500 3.300 600 1.500 220,000 5,000 6,800 850 2.600 315,000 7,500 6,000 3,100 3,000 Note: Draw the Cash Flow Diagram and then solve using EUAW method.