Gce Model Questions Vol1 2024 Geography Question 24

A coastal town faces two hazards. Storm surges of height ≥3 m occur on average once every 15 years, causing average property damage of ₦2.5 million per event. Coastal erosion advances the shoreline at 0.8 m yr⁻¹; a 150 m seawall protects 0.5 m yr⁻¹ of shoreline, otherwise the town would lose 30 houses (valued at ₦1.2 million each) over 20 years. The town can extend the seawall at a cost of ₦18 million, increasing protection to 0.9 m yr⁻¹. Using a 20‑year planning horizon and a discount rate of 5 % p.a., calculate the net present value (NPV) of expected loss without the extension, and the NPV of expected loss with the extension (including construction cost). Should the town proceed with the extension? Provide the decision.