APPENDIX C: EXPLANATION OF TABLE AND CHART-PRESENT WORTH OF PROJECTED REVENUE

THE ACCOMPANYING TABLE AND CHART ARE FOR ILLUSTRATIVE PURPOSES. THE TABLE IS ONE OF A SERIES EXTENDING FROM A DISCOUNT RATE OF 1 PERCENT TO THAT OF 8 PERCENT - EACH BASED ON AN ORIGINAL UNIT OF REVENUE OR TRAFFIC GROWING AT 5 PERCENT A YEAR IN A STRAIGHTLINE INCREASE. THE TABLES ARE COMPUTED TO SHOW THE YEAR-BY-YEAR GROWTH AND PRESENT WORTH FOR A 30 YEAR PERIOD. IN PRACTICE, THE YEAR-BY-YEAR GROWTH WOULD ORDINARILY BE COMPUTED BY FORECASTING EACH COMPONENT THAT ENTERS INTO THE COMPOSITE FORECAST, BECAUSE EACH STATE OR LOCAL PROJECT MIGHT HAVE DIFFERENT RATES OF TRAFFIC GROWTH AND REVENUE EARNINGS. PROJECTIONS OF TRAFFIC ON A NATIONAL BASIS SHOW AN EXPECTED GROWTH OF 4.7 PERCENT FROM 1956 TO 1976 AND AN EXPECTED GROWTH OF 4.9 FROM 1956 TO 1986, DEVIATING SLIGHTLY FROM A STRAIGHTLINE GROWTH. WHEN THERE IS A CONSISTENT AND CONTINUOUS GROWTH THE COMPUTATION OF CONTINUOUS COMPOUNDING AND CONTINUOUS PRESENT WORTH MAY BE THE IDEAL APPROACH, BUT IN TRAFFIC AND REVENUE GROWTHS THERE ARE SEASONAL FLUCTUATION AND ERRATIC GROWTHS WHICH DO NOT JUSTIFY SUCH REFINEMENT IN THE MECHANICS OF COMPUTING. /ARTICLE/

Media Info

  • Monograph Title: ECONOMIC ANALYSIS IN HIGHWAY PROGRAMMING, LOCATION AND DESIGN: WORKSHOP CONFERENCE PROCEEDINGS, SEPTEMBER 17, 1959
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00201835
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Aug 26 1970 12:00AM