A city administrator with a $100,000 annual budget is trying to decide between fixing potholes or directing traffic at several busy intersections after school. Studies have shown that 15 cars hit potholes every week, causing average damages of $200. Collisions at the intersections are less frequent, averaging one per month at an average cost of $6,000, although none have ever caused injuries or deaths. Use this information to answer the following questions.

1. What are the annual costs from the pothole damage?

2. What are the annual costs due to damage from
collisions?

3. Given the size of the annual budget, make your
recommendation as to which project should be
undertaken. Explain you answer in terms of dollar
benefits per dollar spent.