One of two alternatives will be selected to reduce flood damage in a rural community...
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One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associated with each alternative are available. Use B/C analysis at a discount rate of 5% per year over a 20-year study period to determine which alternative should be selected. For analysis purposes only, assume that the benefits of reduced flood damage are available in years 3, 11, and 18 of the study period.
| Retention Pond | Channel | |
| Initial Cost, $ | 840,000 | 2,200,000 |
| Annual Maintenance , $/Year | 92,000 | 30,000 |
| Reduced Flood Damage, $ | 200,000 | 700,000 |
The B/C ratio is ...............
The alternative that should be selected is the ................
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