Reference no: EM131097521

Oil spills in the Gulf of Mexico have been known to cause extensive damage to both public and private oyster grounds along the Louisiana and Mississippi shores. One way to protect shellfish along the shoreline is to release large volumes of fresh water from the Mississippi River to flush oil out to sea. This procedure inevitably results in death to some of the saltwater shellfish while preventing more widespread destruction to public reefs. Oil containment booms and other temporary structures can also be used to intercept floating oil before it damages sensitive fishing grounds. If the Fish and Wildlife Service spent $110 millions in year 0 and $50 million in year 1 and 2 to minimize environment damage from one particular oil spill, what is the benefit-to-cost ratio provided the efforts resulted in saving 3000 jobs valued at a total of $175 million per year? Assume disbenefits associated with oyster deaths amounted to $30 millions in year 0. Use a 5 years study period and an interest rate of 8% per year.