A city engineer has compiled the following data on a flood damage project. To co

Question

A city engineer has compiled the following data on a flood damage project. To control the

flood, the construction of a small dam will cost $100,000. Based on the estimated damage

data collected, determine if the dam should be constructed.

Damage Estimate

Probability

$ 200,000

0.30

$100,000

0.50

$50,000

0.10

$0

0.10

a. Construct the dam

b. Do not construct the dam

c. Not enough data

d. Neither of the above

Please show me how to solve this problem. I need to KNOW how we come up with the right solution.

Damage Estimate

Probability

$ 200,000

0.30

$100,000

0.50

$50,000

0.10

$0

0.10

Explanation / Answer

We generally do not answer the questions of those who are having low rating. You are having a rating of "95%". Please rate all answers and improve your rating. Even if you find the answers are incorrect, first rate Lifesaver or helpful to the best answer and then rate other answers as not helpful. But do rate them for the good of both of us. Thanks!! Coming to the problem Total cost of damage from the given table = (200000*0.3)+(100000*0.5)+(50000*0.1)+(0*0.1) = 115000 > 100000 = The cost of construction of dam. So b. Do not construct the dam.

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