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Engineering · Mechanical Engineering
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A large city is considering two transportation projects to address its traffic congestion. The first one is a light-rail system while the second one is a new highway. Some economic data on both are presented below: Operating cost, First cost, million S millionShyear Project Light-rail system 45 8.5 Highway 73 In addition, the expected benefits from reduction in air pollution are $25 million per year in the case of the light-rail system and $22 million per year in the case of the highway. Service lives of the two alternatives are 60 years. Assuming a 10% MARR as suggested by the Canadian Treasury Board for public projects, which project is preferred based on modified cost benefit ratio? (8 marks)

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