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A state government is planning a hydroelectric project for a river basin. In addition to the production of electric power, this project will provide flood

A state government is planning a hydroelectric project for a river basin. In addition to the production of electric power, this project will provide flood control, irrigation and recreation benefits. The estimated benefits and costs that are expected to be derived from this project are listed below.

Initial cost = Rs. 18,00,00,000

Annual power sales = Rs. 1,20,00,000

Annual flood control savings = Rs. 50,00,000

Annual irrigation benefits = Rs. 80,00,000

Annual recreation benefits = Rs. 40,00,000

Annual operating and maintenance costs = Rs. 50,00,000

Life of the project = 40 years

Check whether the state government should implement the project (assumei = 15%)

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