Hello, i missed my last class that went over how to answer these questions.

Please help me to understand this.

STATEMENT: The EPA is considering an application from the state of Colorado for a large dam project on the Colorado River. The basic costs and benefits of the project (in inflation-adjusted dollar values) are as follows:

Costs:

Costs Construction costs: $900 million/year first three years

Operating costs: $80 million/year

Agricultural product lost from flooded lands: $65 million/year

Forest products lost from flooded lands: $40 million/year

Benefits:

Revenues from Power Generation:

 

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