A coastal town is exposed to two independent flood hazards each year: (i) a storm surge that exceeds 2 m with probability 0.02, and (ii) a river overflow that exceeds 1 m with probability 0.03. A flood occurs if either hazard exceeds its threshold. The expected economic loss when a flood occurs is ₦20 million. The town can implement one of the following mitigation measures within its ₦8 million budget:

* Sea wall costing ₦5 million that reduces the probability of storm surge by 70 %.
* Up‑stream dam costing ₦8 million that reduces the probability of river overflow by 60 %.

Which mitigation option should be chosen to achieve the greatest reduction in expected annual flood loss? Show all calculations.

Question

A coastal town is exposed to two independent flood hazards each year: (i) a storm surge that exceeds 2 m with probability 0.02, and (ii) a river overflow that exceeds 1 m with probability 0.03. A flood occurs if either hazard exceeds its threshold. The expected economic loss when a flood occurs is ₦20 million. The town can implement one of the following mitigation measures within its ₦8 million budget:

* Sea wall costing ₦5 million that reduces the probability of storm surge by 70 %.
* Up‑stream dam costing ₦8 million that reduces the probability of river overflow by 60 %.

Which mitigation option should be chosen to achieve the greatest reduction in expected annual flood loss? Show all calculations.

Accepted Answer

Build the upstream dam; it lowers the expected annual loss to about ₦0.635 million, a larger reduction than the sea wall.

Waec Model Questions Vol1 2020 Geography Question 19

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