1. River Kisigo flows through an area next to a medium sized cityinto river Rufiji. During recent years, annual floods have damagedhomes in its vicinity at an increased' rate. Average annual flooddamages have been estimated to be Tshs 180M at present and areexpected to increase by Tshs 12M each year. To contain excessiverunoff two proposals have been made. One is to do some channelimprovement (CI). Another proposal is to build a storage dam andsmall reservoir (D&R). Initial cost of CI is Tshs 240M andannual maintenance is expected to be Tshs 18M. Initial cost ofD&R is Tshs 960M, annual operation and maintenance is estimatedto be Tshs 27M. If the CI is made, average annual flood damages areexpected to be Tshs 108M at present and to increase by Tshs 7.2Meach year. If the D&R is built, average annual flood damagesare expected to be reduced to Tshs 18M at present and to increaseby Tshs 3M each year. The D&R will remove certain land fromagriculture and possible future development. This dis-benefit,valued at Tshs 20M per year, is partially offset by improvedrecreational fishing valued at Tshs 10M per year. Using an interestrate of 12% and benefit /cost analysis establish which proposalshould be chosen. Make your own assumptions regarding theclassification of costs and benefits/consequences.