A state agency is considering construction a reservoir to control flooding on the Big Wahoowa River. They are considering two mutually exclusive reservoirs. The creation of a reservoir will cause a...

A state agency is considering construction a reservoir to control flooding on the Big Wahoowa River. They are considering two mutually exclusive reservoirs. The creation of a reservoir will cause a reduction in agricultural production in the region. The reservoirs have a life expectancy of 80 years and the state uses a long-term interest rate of 3%. The options are described below. If reservoirs can be constructed in one year, would you recommend constructing a reservoir, and if so, which one? Show your work, including cash flows, to justify your answer. Besides the two impacts of reservoir construction stated in the problem, name another impact of reservoir construction. How might this impact your analysis?