Your department wants to start a new weather satellite program to examine the frequency of new hurricanes in the Indian Ocean. The program expected to cost $900 million over the next 10 years. Congress likes this program; the White House thinks it is a waste of money. Tax revenues are in short supply and this program will be funded through deficit spending. You argue the new program will save money in the long run because it will provide at least $30 million of storm damage savings per year for the next 10 years.

• In nominal terms, will this program result in positive benefits for your department and the taxpayers who fund it?
• Using the present value valuation or the discount rates for the costs will be 7% and the discount rates for the benefits are 3% is the net present value for this program positive?
• Should your department pursue this program over the next 10 years? Are there benefits missing? Are there unknown costs? Explain.