Question

A flood control project at Pleasant Valley dam is projected to cost $1,980,000 today, have annual maintenance costs of $59,000, and have major inspection and upkeep after each 5-year interval costing $290,000. If the interest rate is 8%/year.

Answer 1

The flood control project at Pleasant Valley dam needs to be evaluated for its economic viability by calculating the present worth of costs and benefits.

Step-by-step explanation:

The subject of this question is Mathematics and it is appropriate for High School level.

To determine if the flood control project at Pleasant Valley dam is economically viable, we need to calculate the present worth of all costs and compare it to the present worth of the benefits. The present worth of costs includes the initial cost, annual maintenance costs, and major inspection and upkeep costs. The benefits include the savings in human lives and economic damage prevented.

Using the 8% interest rate, we can calculate the present worth of all costs and benefits.