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

information:

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

expected?