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<br />CHAPTER EIGHT <br /> <br />FINANCIAL PROGRAM <br /> <br />The following benefit-cost study will address the financial feasibility <br />of the project. <br /> <br />Since this project proposes to replace an existing structure with like, <br /> <br />no new benefits will accrue. However, if the existing dam were to fail, the <br /> <br />farms would be forced to use irrigation wells for water. It has been estimated <br /> <br /> <br />that to do so would currently add $50 per acre to the cost of all crops. This <br /> <br />increased cost is due to pumping expenses, pump wear and increased maintenance, <br /> <br />etc. In addition, because the irrigation wel~cannot supply all the water <br /> <br /> <br />required for all areas, an estimated crop loss of 20% would occur. Using <br /> <br /> <br />current crop figures this works out to the following: <br /> <br />$50 x 3,547 acres crops <br />20% crop value loss .2 x 1715630.00 <br /> <br />$177,350.00 <br />$343,126.00 <br />$520,476.00 <br /> <br />Therefore, should the dam fail losses of $520,000.00 would occur. <br /> <br />Since the cost of the project is $216,770.00, the benefit-cost ratio is <br /> <br />Benefit OR $520,476.00 = 2.4 <br />Cost $216,770.00 <br /> <br />Thus, it can be seen this project is economically feasible. <br /> <br />-25- <br />