Neco 2023 Geography Question 10

A proposed road segment of 50 km will cost \(\text{₦}120\) billion to construct. Expected annual traffic is 12 000 vehicles, each paying a toll of \(\text{₦}2{,}500\). Operating cost per vehicle is \(\text{₦}500\) and fixed annual maintenance is \(\text{₦}1.5\) billion. Using a discount rate of 8 % and a 20‑year analysis period, calculate the net present value (NPV) of the road project. An alternative railway would cost \(\text{₦}150\) billion, carry 8 000 passengers per year at a fare of \(\text{₦}5{,}000\) each, with operating cost \(\text{₦}1{,}200\) per passenger and fixed maintenance \(\text{₦}2\) billion per year. Compute the railway's NPV under the same assumptions and state which option is financially preferable.