ABS Municipal Gas Company intends to begin constructing new gas storage facilities to accommodate the latest regulatory order to deregulate the gas industry.

The president in charge of the new project proposes two options.

1) An underground deep storage facility (UDSF)

2) A liquefied natural gas facility (LNGF)

The president has developed a project selection model and uses it in presenting the project to the Board of Directors.

For the models, he has gathered the following information:

Since the presidents background is in finance, he believes the best model to use is a financial one, net present value analysis.

As you are an independent director of the Board, would you accept this model and advise why you would or why you would not? Base your answer on the five criteria developed by Souder (1973) and evaluate this model in terms of the criteria.

A brief description of the Project selection and criteria of choice based on Souder (1973) should be included in your answer. Answer must consist of 2.300 words.