Restoration of wetlands can help reduce nutrient runoff and harmful algal blooms like those that occur on Lake Erie (Figure 4.5). A year-long restoration project is estimated to cost $10 million. It is estimated to provide benefits worth $750,000 per year for the next 20 years. Is this a worthwhile investment if the discount rate is 8 percent or 2 percent? For what value of discount rate will this project be feasible?

Figure 4.5:

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Toledo Figure 4.5 Lake Erie with algal blooms (gray water) on September 24, 2017. Image courtesy of NASA.