Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 51

In 2010, the city of Houston, Texas, collected $24,112,054 in fines from motorists because of traffic violations caught by red-light cameras. The cost of operating the system was $8,432,372. The net profit, that is, profit after operating costs, is split equally (that is, 50% each) between the city and the operator of the camera system. What will be the rate of return over a 3-year period to the contractor that paid for, installed, and operates the system, if its initial cost was $9,000,000 and the profit for each of the 3 years is the same as it was in 2010