PROBLEM #1: The local nuclear power plant has decided that the best place to store its high-level nuclear waste ( small in volume but highly radioactive)would be in an unoccupied field next to your college campus. They proposed to build storage sheds, properly shielded so that the level of radioactivity at the site boundary is equal to background radiation, and use these sheds for the next 20 yrs. The power plant serves a population of 2 million and it is presently costing the power company $ 1.2 million/yr to dispose of the spent fuel in Washington state. The new facility will cost $800,000 to construct and $150,000/yr to operate. The power industry pays 8% interest on its borrowed money. The power company is willing to pay the college $200,000/yr rent. a. Will the power company save money? b. If you are the college president, decide if this is an acceptable scheme by using 1. A cost/effectiveness analysis 2. A benefit/cost analysis If additional information is needed, assume reasonable values and conditions.

PROBLEM #1: The local nuclear power plant has decided that the best place to store its high-level nuclear waste ( small in volume but highly radioactive)would be in an unoccupied field next to your college campus. They proposed to build storage sheds, properly shielded so that the level of radioactivity at the site boundary is equal to background radiation, and use these sheds for the next 20 yrs. The power plant serves a population of 2 million and it is presently costing the power company $ 1.2 million/yr to dispose of the spent fuel in Washington state. The new facility will cost $800,000 to construct and $150,000/yr to operate. The power industry pays 8% interest on its borrowed money. The power company is willing to pay the college $200,000/yr rent. a. Will the power company save money? b. If you are the college president, decide if this is an acceptable scheme by using 1. A cost/effectiveness analysis 2. A benefit/cost analysis If additional information is needed, assume reasonable values and conditions.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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