Ordinary equity component to be used in financing projects

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Reference no: EM131956746

China spends an estimated $100,000 per year on cloud seeding efforts, which includes using antiaircraft guns and rocket launchers to fi ll the sky with silver iodide. In the United States, utilities that run hydroelectric dams are among the most active cloud seeders, because they believe it is a cost-effective way to increase limited water supplies by 10% or more. If the yields of cash crops will increase by 4% each year for the next 3 years because of extra irrigation water captured behind dams during cloud seeding, what is the maximum amount the farmers should spend now on the cloud seeding activity? The value of the cash crops without the extra irrigation water would be $600,000 per year. Use an interest rate of 10% per year.

Reference no: EM131956746

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