Gce Model Questions Vol1 2018 Geography Question 43
Practice objective / multiple choice question 43 from the 2018 Gce Model Questions Vol1 Geography examination.
A coastal town faces two environmental hazards. The probability of a severe flood in any given year is 0.04, with an average damage cost of £2.5\,million. The probability of a landslide is 0.02, with an average damage cost of £4\,million. A mitigation scheme costs £0.5\,million to implement (no recurring cost) and lasts 10\,years. The scheme reduces the flood probability by 40\% and the landslide probability by 25\%. Using a discount rate of 5\% per year, should the town invest in the scheme? Give a Yes/No answer and state the net present value (NPV) of the avoided damages (in £\,million, to three decimal places).
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About This Question
This is Gce Model Questions Vol1 2018 Geography Question 43. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Geography examination.
Difficulty level: Hard .
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