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Select the better of two proposals to improve street safety and lighting in a colonia in south central New Mexico

Economics

Select the better of two proposals to improve street safety and lighting in a colonia in south central New Mexico. Use a B/C analysis and an interest rate of 8% per year. Proposal 1 Proposal 2

Initial cost, $ 900,000    1,700,000

Annual M&O cost, $/year 120,000 60,000

Annual benefits, $/year 530,000 650,000

Annual disbenefits, $/year 300,000 195,000

Life, years 25 30

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