3. Based on Problem 8-12 The Highridge region needs an additional supply of water from Steep Creek. The enginees has selected two plans for comparison: Gravity plan. Divert water at a point near 10 km up Steep Creek and carry it through a pipeline by gravity to the district. Pumping plan. Divest water at a point near the district and pump it through 2 km of pipeline to the district. The pumping plant can be built in two stages, with half-capacity installed initially and the other half 10 years later. Gravity Pumping Initial investment $2,800,000 $1,400,000 Investment in 10 year 200,000 Operation, maintenance, 10,000 25,000 replacements, per year Average annual power cost, first 10 years 50,000 next 30 years 100,000 Average annual benefits First 20 years $200,000 $200,000 Next 20 years $400,000 $400,000 0 0 0 Use a 40-year analysis period and 8% interest. Salvage values can be ignored. Use benefit-cost ratio analysis to recommend which plan is better