Question

As a hydrologist, you have identified the following five different treatments for reducing sedimentation within the watershed. Project Initial Investment ,NPV , IRR , A: $ 100,000 $ 50,000 .13 B: $ 1,000,000 $ 245,000 .09 C: $ 800,000 $ 100,000 .14 D: $ 2,000,000 $ 750,000 .11 E: $ 600,000 $ - 75,000 .02 The discount rate used by the watershed district on its projects is 3.5%. The five projects are now divisible, meaning you can implement them at smaller scales. Your watershed manager has indicated that the budget for watershed protection is limited to $3.5 million. What is your recommendation to the district manager for expenditure of available project dollars for watershed protection?

Answer 1