The right-of-way for a new highway will cost $1.5 million. The roadbed and earthworks will...
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The right-of-way for a new highway will cost $1.5 million. The roadbed and earthworks will cost $3 million. The pavement will cost $2.5 million and its life is 20 years. The discount rate is 9%, and the project has an assumed life of 20 years. The new highway will save travelers $900K worth of travel time eash year. What is the benefit/cost ratio if the right-of-way cost is the disbenefit to property owners? What is the the benefit/cost ratio if the right-of-way cost is the price paid by goverment in eminent domain proceedings?
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