Question

2) The World Bank is considering an application from the country of Equatoria (not a real country) for a large dam project. Some costs and benefits of the project are as follows: • Construction costs: $500 million per year for three years • Operating costs: $50 million per year • Hydropower to be generated: 3 billion kilowatt-hours per year • Price of electricity: $0.05 per kilowatt-hour Irrigation water available from dam: 5 billion gallons per year • Price of irrigation water: $0.02 per gallon • Agricultural product lost from flooded lands: $45 million per year • Forest products lost from flooded lands: $20 million per year There are also additional, less easily quantifiable losses: Human costs to villagers who will be forced to move, watershed damage, and ecological costs of habitat destruction. It is also possible that the new lake arca may contribute to the spread of water-bome diseases.

question b and c only please

Answer 1

From the desk of DATE hool (b) On previous part we found that world Bank Pncurred losses on both the Sienai os of Discount ie with 900 M with sy. Discow Rate 8 1026m with 10% Discount Rate P.S. Calculations can be done by Zollowing the so same steps: Now , а и aleonar's pro jotf we have : ССс Сеѕ fpcion cost) - 1500 г 20 м ос Горола (cser ) 2 19 00 м Т( К 401 — ERE Elecrotcity Renouve] - (B xo'os) 130 = 2.25 3 1.00 tои го глед Пеа е = 9 до му,0 - оос 3 TR = 2.25 xolos — З• 3 Вfo@ion:

DATE - From the cesk of Now, we consida both the discout Rates Siomultaneously & norice the efloche on rast & Benefite 97. Discout Rate Coy Discone Rate (C = 750 = 652.17 mel/ cc - 250 g = 163.5 OC = 150/1003 - 347.2 loc = 180o/.po a 86 will IC - 652.17 +342.2 EQQQ.3 mil TIL - 563.5 +86 - Guas -(110)30 TR = ERT WR LIR = 2300 1.0530 = 7300 Mello los 130 = 131.8 = $32.47 Net Loss = 994.30532.42 1 Net Lors -517.7 -466.83

so here we can see that in both the alternatives World Bank incen los but loss lopth in alternatine (blare much Je lesses than alternative (a). Morona discount sate of Sy lealls to lessed losses than that of lor. in both altesnakone. Hence a policy helpiey discount sote lesser should be implied And world Bank should build Six smaller dame Pustead of our a lage one to minimize their 2018