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(20 pts) The U.S. Bureau of Reclamation is considering a hydroelectric dam project on the Phoenix River. The dam will cost $330 million to construct

(20 pts) The U.S. Bureau of Reclamation is considering a hydroelectric dam project on the Phoenix River. The dam will cost $330 million to construct and $8 million per year to operate and maintain. In addition to providing $12 million per year in electrical power sales, the dam will eliminate $35 million per year in flooding damage. Perform a conventional B/C analysis on this project. Assume a 4% cost of capital and an infinite life. Clearly state whether or not the dam is financially justified.

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