Calculate the net present value to the society

Assignment Help Business Economics
Reference no: EM13853333

Suppose El Centro California decides to tackle the problem of nitrates in the water. Nitrates are compounds derived from synthetic fertilizers that are not assimilated by plants and leached out into the underground water and affect the human health. The way they decide to do it is to establish a new kind of water filtering technology the initial cost of such technology was 7.2 million in 2015. You are in charge of giving recommendations to the parties involved if this project is feasible.

-In 2016, incremental benefits from reducing nitrates will equal to $6.116 million while incremental cost will be $4.410

-In 2017, incremental benefits from reducing nitrates will equal to $6.211 while incremental cost will be $4.440

-In 2018, incremental benefits from reducing nitrates will equal to $7.1 million while incremental cost will be $4.5

At this time the Inflation rate is expected to be at 3.01 %

Based in this information:

1. Adjust benefits and cost to 2015 numbers (Example 2015 = time is 1)

2. Adjust for the opportunity cost of money taking into account a discount rate of 7% for costs and benefits

3. Calculate the Net present value to the society

4. Calculate the benefit to cost ratio and interpret both results Explain based on these 2 metrics if the 3 year benefit-cost analysis is feasible.

Reference no: EM13853333

Questions Cloud

Tightening of consumer credited effected individual spending : How has the tightening of consumer credited effected individual spending and in turn the U.S. economy? Has this strategy by the financial institutions helped our economic recovery?
Implicit cursor to print out the mid of manager of bob : Write an anonymous PL/SQL program to compute the sum of 1, 3, 5, 7, 9. You must use a loop -  implicit cursor to print out the MID of manager of Bob.
Consider the goods and services : Consider the following goods and services. Which are the most likely to be produced in a perfectly competitive industry? Which are not? Explain why you made the choices you did, relating your answer to the assumptions of the model of perfect competit..
Physician-ethicist at hope hospital in nirvana : You are a physician-ethicist at Hope hospital in Nirvana, USA. Your state is voting this month whether to allow PAS, under the exact guidelines and safeguards instituted in Oregon. The local news station has asked you to join a televised multi-discip..
Calculate the net present value to the society : Suppose El Centro California decides to tackle the problem of nitrates in the water. Nitrates are compounds derived from synthetic fertilizers that are not assimilated by plants and leached out into the underground water and affect the human health. ..
What is the slope of the above budget constraint : Sidney makes $200 per week. She buys only two items: pizza and beer. The price of a pizza is $5 and the price of each beer is $2. What is the y-axis intercept for the above budget constraint? What is the x-axis intercept for the above budget constrai..
Find his optimal bundle of coffee and donuts : Billie Joe loves Krispy Kreme donuts and coffee. Billie Joe likes to eat 3 donuts (D) for each cup of coffee (C) he drinks. His utility function is: U = min(0.333D, C). The price of each donut is $0.60 and the price of coffee is $2.20. Given Billie J..
Index models-capm and apt : Download 61 months (September 2010 to September 2015) of monthly data for the SPDR S&P 500 Index ETF (symbol = SPY). Download 61 months (September 2010 to September 2015) of Microsoft Corporation data (symbol = MSFT) and 61 months (September 2010 ..
Explain how the internet challenges the protection : Explain how the Internet challenges the protection of individual privacy and intellectual property.  What should governments do, if anything, to protect their citizens?   Include reference to source material for this discussion.

Reviews

Write a Review

Business Economics Questions & Answers

  Revised expected future exchange rate influences

Yesterday, the current exchange rate was $ 1.05 Canadian per U. S. dollar and traders expected the exchange rate to remain unchanged for the next month. Today, with new information, traders now expect the exchange rate next month to fall to $ 1 Canad..

  Minimum when marginal cost equals average cost

This unit describes key characteristics governing how firms operate in the short run and the long run. Perhaps the most important concepts in the unit are the shapes and the logic of the short-run and long-run cost curves. Can you explain why average..

  Motive for holding money

Which of the following is not a motive for holding money in? Keynes's liquidity preference? theory?

  Q1 butler leased a certain piece of property from wheeler

q1. butler leased a certain piece of property from wheeler with an option to purchase it at later dates. the agreement

  Determine the equivalent present worth-annual series amounts

A total of $400,000 will be deposited one year from now for the gas pipeline maintenance in the area. They estimate that the deposit amount will increase by $80,000 per year for 6 years thereafter, determine the equivalent: (a) Present worth and (b) ..

  How much damages should be awarded to x co

The marginal cost to X Co. of supplying an additional tractor to a customer is $300. X Co. sues Mr. Y for breach of contract. How much damages should be awarded to X Co

  Explain how a clear and simple policy targets agreement

Explain how a clear and simple Policy Targets Agreement (PTA) might have helped to maintain a low inflation regime with low unemployment in the 1990s while in 2012 a similar regime no longer seems to be achievable under a very different PTA.

  Profits encourage entry into purely competitive industries

Why profits encourage entry into purely competitive industries and explain how losses encourage exit from purely competitive industries.

  Explain rational expectations

Explain rational expectations in your own words. Using the rational expectations model is the U.S. stock market efficient? Why or Why not?

  Illustrate what are the state doing that is consistent

Illustrate what are the State's doing that is consistent with the constitution.

  Explain the impact of each of upon commercial bank reserves

Explain the impact of each of the following upon commercial bank reserves: (a) the Federal Reserve sells government bonds in the open market to private buyers;

  Fatal accidents between the two companies

Elucidate the value of a trucker's life disguised by compensating discrepancy among the two firms.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd