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<br />.' <br /> <br />.' :') t.. ~ t7~ <br />l...~~' <br /> <br />"BuRec has chosen its time period of analysis of project benefits <br />as 100 years. Although the reservoirs and canals might last that <br />long, the value of the benefits from the project become very doubtful <br />when projections are made that far in the future. For that reason, <br />economists have long argued that the physical life of the constructions <br />should not be used as the time period of analysis. Instead, a shorter <br />time period, representing the period during which the analyst is <br />reasonably certain the benefits will occur, should be chosen. If <br />a properly high discount rate (B to 10 percent) is used, the time <br />period chosen will not be crucial, for by the 40th or 50th year the <br />present value of a year's benefits is quite small. If, however, <br />a very low discount rate, such as the 2.875 percent chosen by <br />BuRec in evaluating the economic justification of the Garrison <br />Diversion project, is used, the difference between 50 years and <br />100 years is substantial. The use of a lOO-year instead of a 30 <br />or 50-year time period exaggerates, again, c the benefits of the <br />project." , <br /> <br />~.8-:-.:- <br />