50.1K

Verified Solution

Link Copied!

Please calculate NVB, NVC, and present value of net benefits. Work shown please

Suppose that hydraulic fracking releases dangerous chemicals into drinking water that are not removed by conventional public treatment works. Further suppose that scientific studies reveal that exposure to these chemicals results in a 0.4% probability of death, annually. As a result of growing evidence, the EPA imposes new regulations requiring municipalities to update their water treatment facilities by 2025, reducing the risk to 0.2%. The updates will require an up front cost of $150 billion for construction which will be completed by 2025. The updated treatment works, when operational, will cost an additional $1 million annually over the currently operating treatment works, through 2040 when the treatment works will become obsolete. The municipality serves 800,000 residents in 2020. Assuming a $10 million valuation of a statistical life, an inflation rate of 2%, and a social discount rate of 3% find the following: 1. NVB 2. NVC 3. Present Value of Net Benefits Suppose that hydraulic fracking releases dangerous chemicals into drinking water that are not removed by conventional public treatment works. Further suppose that scientific studies reveal that exposure to these chemicals results in a 0.4% probability of death, annually. As a result of growing evidence, the EPA imposes new regulations requiring municipalities to update their water treatment facilities by 2025, reducing the risk to 0.2%. The updates will require an up front cost of $150 billion for construction which will be completed by 2025. The updated treatment works, when operational, will cost an additional $1 million annually over the currently operating treatment works, through 2040 when the treatment works will become obsolete. The municipality serves 800,000 residents in 2020. Assuming a $10 million valuation of a statistical life, an inflation rate of 2%, and a social discount rate of 3% find the following: 1. NVB 2. NVC 3. Present Value of Net Benefits

Answer & Explanation Solved by verified expert

See Answer