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Economics

Choose between two rebate options. Option 1, Will cost an average of $80 per house. This option will to achieve a 8% drop in overall household water use over a 5-year period. Benefit the will be $2.25 per household per month. Option 2 will cost $500 per household, but it will result in reduced water cost at an estimated $10 per household per month. At a discounted rate of 0.5%permonth, which option, if either, should the utility undertake? Use the conv. B/C method via AW (DN considered), and advise which program should be selected.