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The US EPA has determined that cleaning up the local watershed so it will meet healthy water standards will cost $300 million. They support their
The US EPA has determined that cleaning up the local watershed so it will meet healthy water standards will cost $300 million. They support their claim for the need to do this project by saying that the economic value of the healthy water to the citizens in the area is $15 million dollars per year in lower health costs, recreation, and quality of life. These benefits are expected to continue for 50 years. The opportunity cost of government money is normally the current rate of treasury bills which is 3%/year. Using Benefit/Cost Analysis determine if this use of government money makes sense. Present value of the costs = $ million (enter as number in whole millions, do not enter $ sign) Annuity factor of the benefits = (enter as number to 4 decimal places) Present Value of the Benefits = $million (millions with 3 decimal places, do not enter $ sign) Benefit/Cost Ratio for this clean-up = (enter as number to 2 decimal places)
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