Recent development near Eugene, Oregon, has identified a need for improved access to Interstate 5 at one location. Civil engineers and public planners are considering three alternative access plans. Benefits are estimated for the public in general; disbenefits primarily affect some local proprietors who will see traffic pattern changes as undesirable. Costs are monetary for construction and upkeep, and savings are a reduction in the cost of those operations today that will not be necessary for the future. All figures are relative to the present situation, retention of which is still an alternative, and are annualized over the 20-year planning horizon.
Alternative A B C
Benefits $200,000 $300,000 $400,000
Disbenefits $37,000 $69,000 $102,000
Costs $150,000 $234,000 $312,000
Savings $15,000 $31,000 $42,000
a. What is the B/C ratio for each of these alternatives?
b. Using incremental B/C ratio analysis, which alternative should be selected?
c. Determine the value of B - C for each alternative.