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<br />, ., <br /> <br />, <br />,i <br /> <br />...~! <br /> <br />.~ <br />'~ <br /> <br />,; <br />:.! <br /> <br />.~ <br />, <br />., <br /> <br />:~ <br /> <br />. :~ <br />., <br /> <br />:.", <br /> <br />, <br />" <br /> <br />"oj <br /> <br />0.n'2'.' r.! <br />tJ .1 J ": <br /> <br />17 <br /> <br />1 objective, adjustments of costs between objectives should be made as a <br /> <br />Z first step in cost allocation. <br /> <br />3 This adjusted cost will be allocated anlOng purposes so that each <br /> <br />4 purpose bears its separable cost and a share of reluaining joint costs <br /> <br />5 in proportion to the remaining benefits for each purpose. <br /> <br />6 <br /> <br />J. Risk and Uncertainty <br /> <br />7 Risk is characterized by the existence of a distribution of out- <br /> <br />8 comes of events that is known with reasonable certainty. The basis <br /> <br />9 for making a risk allowance in estimating the benefits and costs of a <br /> <br />10 program or project should be clearly stated. <br /> <br />11 Uncerta.inty is characterized by the absence of any known prob- <br /> <br />lZ ability distribution of outcomes for events, and is the general case in <br /> <br />13 water resources planning with the exception of situations of approxi- <br /> <br />14 mately true risk such as hydrologies where long records are avail- <br /> <br />15 able or can be mathematically simulated. Uncertainty should be dealt <br /> <br />16 with in project and program planning by general adjustments based <br /> <br />~ <br />17 largely on judgmenL Also, the nature of the uncertainty thought to <br /> <br />18 surround benefits and costs should be discussed in planning reports, <br /> <br />19 and specific investment strategies, such as flexibility in project <br /> <br />ZO design, recommended to deal with uncertainty. <br /> <br />Zl <br /> <br />K. Sensitivity Analysis <br /> <br />ZZ <br /> <br />Planning organizations should examine the results of planning <br /> <br />Z3 according to the Principles in this document in terms of the sensitivity <br /> <br />Z4 of plans to alternative assumptions as to future prices and econornic, <br /> <br />