A.Using the model calibrated in Problem 4.8 and other information as needed, what
would it cost (per year) to build and operate a new light-rail line given the following
Length of new line: 20 miles
Cost for right-of-way: $12,500/mile
Construction cost: $1,250,000/mile
No. of revenue vehicles needed: 15
Cost/light-rail vehicle: $2,950,000/car
Veh-miles of annual operation: 950,000 veh-miles
Average speed of operation: 18.4 mi/h.
No. of unlinked annual passengers: 21,000,000
B. What are some advantages and disadvantages of a typical AAA-rated municipal
bond yielding 6% compared to a FIDC-insured savings account yielding 6%?
C.A serial bond with a face value of $100,000 is scheduled to make annual payments
over 20 years and be self-liquidating. If yield is 8%, what is the annual payment