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<br />10:;?
<br />
<br />ECONOMIC AND FINANCIAL ANALYSIS
<br />
<br />A major purpose of this postauthorization analysis is to examine the
<br />effect on the economic and financial feasibility of the Narrows Unit
<br />with costs updated to October 1972.
<br />
<br />Economic Justification
<br />
<br />Bene fi ts
<br />
<br />It is assumed that the benefits would not have declined since the
<br />original analysis. Therefore, since the Unit has a favorable benefit-
<br />cost ratio of 1.42 to 1 for total benefits and 1.36 to 1 for direct
<br />benefits, updating of the benefits was not considered to be necessary.
<br />Annual benefits are summarized in table 2.
<br />
<br />Costs
<br />
<br />Updated project and annual operation, maintenance, and replacement
<br />costs were discussed in the preceding section of this report.
<br />
<br />Interest During Construction
<br />
<br />As a result of a lengthened construction period and increased
<br />construction costs, interest during construction increased from
<br />S5,993,900 in the 1969 analysis to S9,989,000 in the present analysis.
<br />The derivation of interest during construction based on October 1972
<br />prices and an interest rate of 3~ percent is summarized in table 1.
<br />
<br />Table 1--lntere6t during construction
<br /> Plant in Annual Interest
<br />Fis cal Servi ce Expend. Accum. 3lr;%
<br />Year ($1000 ) (S1000 ) (S1000 ) (dollars)
<br />1 0.0 52.0 26.0 845
<br />2 0.0 678.0 391. 0 12,707
<br />3 0.0 2,490.0 1,975.0 64,187
<br />4 0.0 6,330.0 6,385.0 207,512
<br />5 0.0 12,560.0 15,830.0 514 ,475
<br />6 0.0 10,095.0 27,157.5 882,619
<br />7 0.0 15,740.0 40,075.0 1,302,437
<br />8 0.0 16,543.0 56,216.5 1,827,036
<br />9 0.0 13,015.0 70,995.5 2,307,354
<br />10 79,946.0 8,134.0 81,570.0 2,651,025
<br />11 7,783.0 2,092.0 6,737.0 218,952
<br /> -------- -------- -------- ---------
<br />SUBTOTAL 87,729.0 87 ,729.0 9,989,149
<br />Future dev. 304.0 304.0 Rounded 'l.n9,Oflfl
<br />Investigations
<br />Costs 1,717.0 1,717.0
<br />TOTAL 89,750.0 89,750.0
<br /> 14
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