One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 8% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume the flood damage would be prevented in years 3, 9, and 18 of the study period.

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Retention Pond Channel 2,900,000 Initial cost, $ Annual maintenance, $/year Reduced flood damage, $ 880,000 30,000 92,000 200,000 600,000