Question: A public utility in a medium-size city is considering two cash rebate programs to achieve water conservation. Program 1, which is expected to cost an

A public utility in a medium-size city is considering two cash rebate programs to achieve water conservation. Program 1, which is expected to cost an average of $60 per household, provides a rebate of 75% of the purchase and installation costs of an ultra-low-flush toilet ($100 max). This program is projected to achieve a 5% reduction in overall household water use over a 5-year evaluation period. This will benefit the citizenry to the extent of $1.25 per household per month. Program 2 involves turf replacement with xeric (low water need) landscaping. The program is expected to cost $500 per household, but it will result in reduced water cost estimated at $8 per household per month (on the average). Use the B/C method at a discount rate of 0.5% per month to determine which program, if any, the utility should undertake. The programs may be

(a) Mutually exclusive,

(b) Independent.

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