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    Peter45's Avatar
    Peter45 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 5, 2011, 08:47 PM
    present value costs
    Suppose Congress is considering removing a dam. It would cost $3 Billion to remove,
    which would all occur this year (t=0). Beginning this year (t=0) and for every year there-
    after, annual benefits will equal $200 Million.
    a) If the discount rate is 10%, should the dam be removed?
    b) If the discount rate is 5%, should we remove the dam?
    c) For what discount rate would Congress be indifferent (i.e. Costs = Net Present Value
    of Benefits)?

    please show work
    kcomissiong's Avatar
    kcomissiong Posts: 1,166, Reputation: 276
    Ultra Member
    		  
    #2

    Apr 7, 2011, 07:32 AM
    Yes, please show work and then we can help you with it.
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