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<br />" <br /> <br />IR1UGAUON BENEFIT-COST <br /> <br />SUARY UNJJER ALTERNATE PROJ ECTION~F <br />(Colorado economic perspective) <br /> <br />PROJECT WATER SUPPLY <br /> <br />" <br /> <br />~ <br /> <br />This sununary computes irrigation benefits and costs, ussuminz that 1'% <br />of the Bureau of Reclamations's estimate of 78 430 AI" is actually delivered. <br /> <br />1. Gross benefits................................... <br /> <br />The sum of direct, indirect and public benefits. <br /> <br />6 732 0001' <br /> <br />2. Direct adverse effects............... .,........... <br /> <br />(a) Opportunity cos t to labor.... .IL,S 0001' <br /> <br />(b) Cost of project water.........615 000 <br /> <br />(c) Unavoidable losses in production in take <br />area and vicinity.......630 000 + 5540y <br /> <br />148 0001' + 1245 500 + 5540y <br /> <br />Here, y denotes total annual net irrigation <br />benefits (line 6 of this page), divided by <br />78 4301' (the amount of project water delivered). <br />On page 3, y is tlH! unknown placed in tile <br />blank <br /> <br />** <br /> <br />3. Indirect adverse effects......................... <br /> <br />278 000 <br /> <br />4. Public adverse effects~.......................... <br /> <br />(a) 5% of total crop value computed in 3. above: <br />. . . . . . . . . . . . . . . . . . . . . . . . . .65 000 <br /> <br />(b) 5% of item 2(c) above......3l 500 + 2771' <br /> <br />96 500 + <br /> <br />277y <br /> <br />5. Total adverse effects.......................o.... <br /> <br />148 0001' + 1620 000 + 5817y <br /> <br />Sum of lines 2, 3, 4. <br /> <br />6. Total annual net' irrigation benefits............. <br />Line 1 minus line 5. <br /> <br />6 584 0001' <br /> <br />1620 000 <br /> <br />58l7y <br /> <br />NOTE: From line 2 and line 6, we have <br /> <br />6504 0001' <br /> <br />1620 000 <br /> <br />5817y <br /> <br />y <br /> <br />----------------7S-430p--------- <br /> <br />Solving this for <br /> <br />y <br /> <br />yields <br /> <br />65841' 1620 <br /> <br />y <br /> <br />= <br /> <br />-----~---------- <br /> <br />78.431' + 5.817 <br /> <br />Thus, once the value of I' is given, y can be computed, and then total benefits, <br />total adverse effects and total net benefits can be computed. (The value of p <br />is usually determined by first computing a revised estimate for the amount of <br />project water available, and then dividing this revised estimate by 78 430.) <br />Th,e relationship between I' and gross benefits is displayed graphically on the <br />next page. <br /> <br />-5- <br />