Question: EXAMPLE 10.5 A government is planning a hydroelectric project for a river basin. In addition to the production of electric power, this project will provide

EXAMPLE 10.5 A government is planning a hydroelectric project for a

EXAMPLE 10.5 A government is planning a hydroelectric project for a river basin. In addition to the production of electric power, this project will provide flood control, irrigation and recreation benefits. The estimated benefits and costs that are expected from the three alternatives under consideration are given in the following table. A B (Rs.) (Rs.) (Rs.) 15,00,00,000 25,00,00,000 40,00,00,000 Initial cost (P) Annual equivalent benefits & cost (a) Operating & maintenance cost (b) Power sales/year (c) Flood control savings (d) Irrigation benefits (e) Recreation benefits 20,00,000 25,00,000 35,00,000 1,00,00,000 1,20,00,000 1,80,00,000 25,00,000 35,00,000 50,00,000 35,00,000 45,00,000 60,00,000 10,00,000 20,00,000 35,00,000 If the interest rate is 9% and the life of projects is estimated to be 50 years, by comparing the BC ratios, determine which project should be selected

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