You are analyzing various programs to reduce water pollution from food processing plants. In consultation with your staff, you have developed the following matrix of effects (where PV = Present Value):

(a) What is the present net value of each alternative? Which alternative has the highest net benefits?
(b) Calculate the benefit-cost ratio for each alternative. Which alternative has the highest benefit-cost ratio?
(c) Which alternative gives the "biggest bang for the buck"-that is, has the lowest cost per ton of pollution removed?
(d) Based on your answers to (a)-(c), which alternative is the most efficient?
The most efficient alternative has the highest net benefits, which would be the tax
(e) Which alternative do you expect (i) labor unions, (ii) environmentalists, and (iii) food processors to support, if one of these will be enacted? Why?
(f) Who, if anyone, do you expect to support the efficient alternative? Why?

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StandardA Standard B Standard C Pollution Tax PV Total Cost (excludes tax) (S million) Annual Plant Costs (S million) (ncludes tax) Food Processing Jobs Lost Tons of BOD Reduced (millions) STon of BOD Removed PI Total Benefits (S million) PNV= PVB-PVC BCR = PVB.PVC 70 1,400 1,750 0.S 1.2 S70 115 S45 1.64 S150 150 -S75 0.67 $50 .63