The World Bank is considering an application from the country of Equatoria for a large dam project…. Show more The World Bank is considering an application from the country of Equatoria for a large dam project. Some costs and benefits of the project (dollar values) are as follows: • Construction costs: $500 million/year for three years • Operating costs: $50 million/year • Hydropower to be generated: 3 billion Kilowatt hours/year • Price of electricity: $0.05/Kilowatt hour • Irrigation water available from the dam: 5 billion gallons/year • Price of water: $0.02/gallon • Agricultural product lost from flooded lands: $45 million/year • Forest products lost from flooded lands: $20 million/year There are also additional, less easily quantifiable, losses: human costs to villagers who will be forced to move, watershed damage, and ecological costs of habitat destruction. It is also possible that the new lake are may contribute to the spread of water-borne diseases. Do a formal cost-benefit analysis using the quantifiable factors listed. Assume that the lifespan of the dam is 30 years; assume that construction begin now (in Year 0). All other impacts start once the dam is completed (in Year 3) and continue for 30 years (until Year 32). For each scenario (a. and b.), indicate a definite “yes”, definite “no,” or uncertain result Scenarios to analyze: A. Do a complete cost-benefit analysis if the interest rate is 5%. Complete the Data summary (for each scenario analyzed) Costs PV Benefits PV Construction $? Hydro Power $? Operation $? Irrigation Water $? Flooded Ag $? Total PV of Benefits $? Flooded Forests $? Total PV of Costs $? Net Benefits (NPV) NB=PVB – PVC ? Discount Rate ?% n ? useful life time of the dam (after construction) Current Value CV(annual) Costs Construction $? Operation $? Flooded Ag $? Flooded Forests $? Benefits Hydro Power $? Irrigation Water $? • Show less