Timing the Smart-Traffic Payback

Ada re-derives this chapter’s own numbers step by step, at full precision

ADA · CALCULATION AUDIT

Timing the Smart-Traffic Payback

The chapter’s smart-traffic case totals $117.05M of CapEx across 4,500 intersections and $13.08M a year of OpEx, set against an annual benefit of $2.175B. Divide the capital by the net benefit and the program appears to repay itself in 19.7 days — under three weeks. This is the chapter’s boldest number, so this audit re-adds every line and re-times the result to ask whether the payback really lands that fast.

Companion to the chapter Costing and Sizing IoT Projects — every number here comes from that chapter.

Ada: This is the chapter’s boldest number — a smart-traffic program repaying itself in under three weeks. A claim that strong deserves a full audit, so let me re-add every line and re-time the payback.

Capital and operating costs first:

• CapEx: 83.25 + 18.9 + 2.4 + 12.5 = 117.05 million dollars
• OpEx: 0.89 + 1.89 + 8.2 + 2.1 = 13.08 million dollars per year

Then the benefit and the payback:

• Total annual benefit: 1.71 + 0.465 = 2.175 billion dollars
• Net of operating cost: 2.175 - 0.01308 = 2.16192 billion dollars, rounded to 2.162 billion
• Return per dollar invested, per year: 2,161.92 / 117.05 = 18.47
• Payback: 117.05 / 2,161.92 = 0.05415 years, and 0.05415 x 365 = 19.76 days, which rounds to 19.8 days.

Every component ties out, and the payback rounds to 19.8 days rather than the 19.7 the text prints (a truncated 19.76) — a rounding nudge that leaves the headline intact: the return is so large that the program repays its full capital cost in under three weeks even after operating costs are netted out.

Every number above is taken from the chapter’s own material and re-derived step by step.