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3. The local nuclear power plant has decided the best place to store its high-level radioactive waste would be in an empty field near your campus. They propose to build storage sheds with proper shielding and use the sheds for the next 20 years. The power plant serves 2 million people and is waste out of state. The new facility will cost $800,000 to construct and $150,000 per year to operate. The power industry pays 8% interest on borrowed money. The power company is willing to pay $200,000 per year rent. (a) will the power company save money with the new option? (b) From an ethical standpoint, which is the correct option and why? currently costing the company $1.2 million per year to dispose of the

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(3) Ansoer ven that (NPV) Net present value of Cost。f the option of disposing waste out of the stote S 1.2 m,llion per year or the next 10 year disc ounted ot g/ 2.0 1.11(1.08)^| +1.2/(1.08)^2 above is in ヒhe form of annuity and from the presenk value of ordinavy annuity table we get the Factor For g and 20 year s9-3181s T),us net Pesent value = S1.2 millionヶ9.81815 I78 million or Sn, 181,780 Analysis 아 2nd option nitia cost of Canstvuction = Śgbo, 000 yearly costs-s,so, ooo+ 200 t 000 -s350, 0oo present value af the yearly cost 350,000 present value of annuit fact or at 3.. and20 year tS 350 looo 9.81815 3, ч 361 352.50 Total net present value = initita9 constvuction cost +S3,436,3515a 200, ooo + 3, Ч 36, 35250 41 2 36 , 352 50 A5 ωe can see the present value of cost of nd pin41236, 352 so) is less thon the present volue of cost of 1st optioen 1 1 78 1 1 780) Thus Power Com pony is clearl Saving monej with the neu optian b) Fvom an ic sond point the First optian is correct ever through it is more e Thes because in case ơf the fist option the ra dio actve waste are being dispase the state and So the resident oF the state ave not being ex Posed to any kind or risk and ha2avdIn case of the secend option even though pvoper shiel ding is being buil the citizens wll sti be exposed to a hazard to theiv heolth in case theve is a leakage fvomb waske that gets un contvolled due to Cevtain civcumstonce that are be yond the contvol of the ower plant ant

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