Plan A Plan B Plan Amortized Yearly Cost 400 000 550 000 Estimated Annual Risk Of Failure 1 50 0 015 1 (5.51 KiB) Viewed 41 times
The cleanup cost, if the groundwater system should fail, is
estimated to be $8,000,000.
a) Determine the annual social cost of failure of each of the two
plans.
b) Determine to total cost per year for the two plans.
c) If minimum total annual cost is the criterion for selecting a
option, what plan should be chosen? Clearly justify
your choice.
Plan A Plan B Plan Amortized (yearly) cost [$] 400,000 550,000 Estimated Annual Risk of failure [%] 1.50 0.015
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