Three transportation improvement plans have beenproposed for heavily populated and congested city.

Alternative I – upgrading of congested signalisedintersections into full grade separated intersections at an initialconstruction cost of $180 million and a salvage value of $22million. Annual operation and maintenance costs will be $230,000per year. Major maintenance in year 20 at $5 million and in year 40at $8 million.

Alternative II - upgrading of bus service to BRTsystem at an initial cost of $155 million and a salvage value of $5million. Annual operation and maintenance costs will be $850,000per year. Major maintenance in year 15 at $10 million, year 30 at$15 million, and year 45 at $22 million will be needed.

Alternative III - introduction of new LRT system withinitial cost of $162 million and a salvage value of $20 million.Annual operation and maintenance costs will be $680,000 per year,and in year 25 a rehabilitation is required which will cost $30million.

Draw the Cash Flow Diagram for all alternatives.Determine which alternative is preferred based on economic criteriaif the analysis period is 50 years and the annual interest rate is4%.

Evaluate the alternatives using the present worth ofcost (PWC), equivalent annual cost (EUAC), and benefit-cost ratio(BCR) methods.