The City of San Antonio is considering various options for providing water in its 50-year plan,...

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Economics

The City of San Antonio is considering various options forproviding water in its 50-year plan, including desalting. Onebrackish aquifer is expected to yield desalted water that willgenerate revenue of $4.1 million per year for the first 5 years,after which less production will decrease revenue by 10% per yeareach year. If the aquifer will be totally depleted in 23 years,what is the present worth of the desalting option revenue at aninterest rate of 5% per year?
The present worth of the desalting option revenue at an interestrate of 5% per year is determined to be $

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As per the question City of San Antonio is considering various options for providing water in 50 year plan and opted for aquifer for desalting the water The revenue generated in the year 1 to 5 from the aquifer 4100000 From the 6th year to 23rd year the revenue decreases by 10 per year each year So the revenue See Answer

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