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11. A flood control project will have a first cost of $1.4 million with an annual maintenance cost of $40,000 and a 10 year life.
11. A flood control project will have a first cost of $1.4 million with an annual
maintenance cost of $40,000 and a 10 year life. Reduced flood damage is
expected to amount to $175,000 per year. Lost income to farmers is estimated
to be $25,000 per year. At an interest rate of 6% per year, should the
project be undertaken?
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