You are a land manager who is tasked with determining whether to build a dam in...
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You are a land manager who is tasked with determining whether to build a dam in a river to generate hydropower or to conserve the river, which allows it to continue to provide recreation and wildlife habitat. Once you build the dam, you cannot remove it. You are confident about the estimates of the dam's energy benefits but have uncertainty about the conserved river benefits. One key factor in that uncertainty is that a large resort may be built nearby, which would quadruple the number of recreators in the river for time 2, thus increasing the recreation benefits. You are considering a two-period planning horizon (each of 10 years). In present value terms, the net benefits are: Project Time 1 net benefits Time 2 net benefits Dam 30 60 Conservation 25 25 if no resort (probability of 0.2) 100 if resort (probability of 0.8) What is the open loop expected value of conservation in time 1 (including both time 1 and time 2 values)? What is the open loop expected value of building the dam in time 1 (including both time 1 and time 2 values)? You are a land manager who is tasked with determining whether to build a dam in a river to generate hydropower or to conserve the river, which allows it to continue to provide recreation and wildlife habitat. Once you build the dam, you cannot remove it. You are confident about the estimates of the dam's energy benefits but have uncertainty about the conserved river benefits. One key factor in that uncertainty is that a large resort may be built nearby, which would quadruple the number of recreators in the river for time 2, thus increasing the recreation benefits. You are considering a two-period planning horizon (each of 10 years). In present value terms, the net benefits are: Project Time 1 net benefits Time 2 net benefits Dam 30 60 Conservation 25 25 if no resort (probability of 0.2) 100 if resort (probability of 0.8) What is the open loop expected value of conservation in time 1 (including both time 1 and time 2 values)? What is the open loop expected value of building the dam in time 1 (including both time 1 and time 2 values)?
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Related Book For
Thermodynamics An Engineering Approach
ISBN: 978-0073398174
8th edition
Authors: Yunus A. Cengel, Michael A. Boles
Posted Date:
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