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A solar panel production factory is located in an area subject to occasional flooding. You have been brought in as a consultant to determine whether
A solar panel production factory is located in an area subject to occasional flooding. You have been brought in as a consultant to determine whether floodproofing of the building is economically justified. The alternatives are as follows:
Option A Do nothing. Damage in a moderate flood is $ and in a severe flood, $;
Option B Install the stormwater pump at a cost of $ to withstand moderate flooding without damage and to withstand severe flooding with $ damages;
Option C Install the stormwater pump and upgrade the sewage system at a cost of $ to withstand a severe flood without damage;
Based on the above information, solve problem
In any year, the chance of no flooding is and the chance of moderate flooding is
What is the expected cost of option B
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