Citation

Spottiswoode RA. Proc. IRCOBI 1975; 3: 84-90.

Copyright

(Copyright © 1975, International Research Council on Biomechanics of Injury)

DOI

unavailable

PMID

unavailable

Abstract

The objectives of road feasibility studies are discussed, comments are made on the selection among mutually exclusive alternatives, observations are made regarding project timing and the losses incurred by deferral. For any given project 2 questions must be answered: which of the competing mutually exclusive alternatives is the best solution to the need? and when should the preferred alternative, perhaps including phasing and stage construction be implemented? Preference is expressed for the criteria of NPV (though this requires a careful study of the appropriate opportunity cost) for the analysis of long term mutually exclusive projects. The correct criteria for timing is that of Annual Incremental Rate of Return (AIRR-defined as the losses incurred by one years deferral divided by the cost). In preparing program comprising road projects which are not mutually exclusive it is, subject to some qualifications, possible to maximize the net present value of the whole program by scheduling construction starts in each years of those projects with the highest AIRR's leaving all other projects to compete for the following year's funds.