China spends an estimated $100,000 per year on cloud seeding efforts which include using antiaircraft guns and rocket launchers to fill the sky with silver iodide. In the United States, utilities that run hydroelectric dams are among the most active cloud seeders because they believe it is a cost-effective way to increase limited water supplies by 10% or more. If the yields of cash crops will increase by 4% per year for the next 3 years because of extra irrigation water captured behind dams during cloud seeding, what is the future worth (in year 3) of the extra value of the cash crops? Assume the interest rate is 10% per year and the value of the cash crops without the extra irrigation water would be $600,000 per year.
China spends an estimated $100,000 per year on
cloud seeding efforts which include using antiaircraft
guns and rocket launchers to fill the sky
with silver iodide. In the United States, utilities
that run hydroelectric dams are among the most
active cloud seeders because they believe it is a
cost-effective way to increase limited water supplies
by 10% or more. If the yields of cash crops
will increase by 4% per year for the next 3 years
because of extra irrigation water captured behind
dams during cloud seeding, what is the future
worth (in year 3) of the extra value of the cash
crops? Assume the interest rate is 10% per year
and the value of the cash crops without the extra
irrigation water would be $600,000 per year.
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