Question- Gürler River flows through an urban area. Due to there have been occasional floods caused damage to properties in this area, a flood control project has been proposed. Estimates have been made for two alternative designs, one involving channel improvement (CI) and the other involving a dam and reservoir (D&R). The estimated project life is 50 years and MARR is 8%. Flood damages are expected to be 780.000 TL per year if the present condition of no flood control (NFC) is continued. The altemative CI will reduce this figure to 200.000 TL and D&R will reduce it to 70.000 TL. The initial cost of CI is 3,2 million TL and estimated annual operation and maintenance cost is 50.000 TL. The initial cost of D&R is 6,5 million TL and estimated annual operation and maintenance cost is 100.000 TL. D&R alternative has also two types of adverse consequences for the public related to the conservation of natural resources. These negative benefits are as follows: The dam will cause a damage to nearby fisheries: priced at 56.000 TL ner vear The reservoir will cause a loss of land
Question- Gürler River flows through an urban area. Due to there have been occasional floods caused damage to properties in this area, a flood control project has been proposed. Estimates have been made for two alternative designs, one involving channel improvement (CI) and the other involving a dam and reservoir (D&R). The estimated project life is 50 years and MARR is 8%. Flood damages are expected to be 780.000 TL per year if the present condition of no flood control (NFC) is continued. The altemative CI will reduce this figure to 200.000 TL and D&R will reduce it to 70.000 TL. The initial cost of CI is 3,2 million TL and estimated annual operation and maintenance cost is 50.000 TL. The initial cost of D&R is 6,5 million TL and estimated annual operation and maintenance cost is 100.000 TL. D&R alternative has also two types of adverse consequences for the public related to the conservation of natural resources. These negative benefits are as follows: The dam will cause a damage to nearby fisheries: priced at 56.000 TL ner vear The reservoir will cause a loss of land
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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Gürler River flows through an urban area. Due to there have been occasional floods caused
damage to properties in this area, a flood control project has been proposed. Estimates have been
made for two alternative designs, one involving channel improvement (CI) and the other involving
a dam and reservoir (D&R). The estimated project life is 50 years and MARR is 8%.
Flood damages are expected to be 780.000 TL per year if the present condition of no flood control
(NFC) is continued. The altemative CI will reduce this figure to 200.000 TL and D&R will reduce
it to 70.000 TL. The initial cost of CI is 3,2 million TL and estimated annual operation and
maintenance cost is 50.000 TL. The initial cost of D&R is 6,5 million TL and estimated annual
operation and maintenance cost is 100.000 TL.
D&R alternative has also two types of adverse consequences for the public related to the
conservation of natural resources. These negative benefits are as follows: The dam will cause a
damage to nearby fisheries; priced at 56.000 TL per year. The reservoir will cause a loss of land
for agricultural purposes, priced at 30.000 TL per year. Decide which alternative to choose by B/C
analysis.
a) Use Annual Equivalent Values
b) Use Present Worth Values with unequal service lives as follow:
Alternatives
Service Life
No Flood Control(NFC)
Channel Improvement(CI)
Dam and Reservoir(DR)
10 Years
15 Years
30 Years
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