Lab-5 Incremental Cost

Questions:

1. about Question 4. Is "Incremental 'cost'" Option B minus Option A?
2. Is the avoided annual cost the values given in the calculation instructions? If we did our calculations right should our "inremental cost" be the same?

Answers:

1. Yes
2. The incremental cost referred to is the construction incremental cost – a one-time cost which you are given – $150,000 (as I announced in class don’t use the $800K).  You are being asked to calculate the annual dollar value of the water that doesn’t run off the site.  It’s not the same thing as the construction cost.