Page 7 of 7 Problem 7: A small dam is being planned for a river tributary that is subject to frequent flooding. Frdur experience, the probabilities that water flow will exceed the design capacity of the year, plus relevant cost information, are as follows: past dam during a Probability of Greater Estimated Annual Damages if Water Flow During a Year Independent for Flows ExceedCapital Investment (S) Exceed different years) Design Capacity 0.055 0.045 0.035 0.04 0.02 2.300,000 2.000,000 1,800,000 1,300,000 950,000 1.750,000 1.650.000 2,200,000 2,500,000 2.800.000 The life of the dam is expected to be 48 years, with negligible salvage value. The capital will cost 8% per year compounded semi-annually. Determine which design should be implemented. (Hint: Calculate the expected total annual costs throughout the 50-year period, including the annual worth of the capital investment)