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The Case for, or Against, New Orleans

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The Case For, or Against, New Orleans

Cost-Benefit Assessment

Too asses and give recommendation on whether or not to rebuild the city of new Orleans I will be examining the cost to benefits of such a rebuild and the impact and benefits it will have towards the city. In the CBA, I will be examining the cost of rebuilding New Orleans to pre Katrina conditions without making any additional upgrades to the levees and infrastructure. This will give me a more accurate cost model to base my recommendation on.

As for the benefits I will examine the benefits of recovered losses when comparing pre Katrina data to post Katrina dat. The areas where I will be examining are tourism recovered, port operations recovered, wages recovered, spending recovered, and taxes recovered. The future value (FV) of these benefits will then be discounted to present value (PV) and compared to the cost of rebuilding to represent the net present value (NPV) of the expected amount to be gained or lost by carrying out the recovery. If the NPV is less than the cost, then rebuilding New Orleans will yield a loss and my recommendation will not favor a recovery. If the inverse is true, and the proposal will be in favor of the recovery.

All calculations will based on post Katrina 2006 reports and data to give a more realistic prediction of the decision that could have been concluded given data directly after the catastrophe.

Costs of Rebuilding

These cost are compiled from the Department of Homeland Securities assessment of the city, found in a summary of costs by MIT students in 2010. * FEMA: $5.5 (3.5) billion * Department of Transportation (DOT): $62.6 million * U.S. Department of Commerce (DOC): $1.3 (0.8) million * U.S. Department of Agriculture (USDA): $250 (100) million * U.S. Army Corps of Engineers: $3 billion * USDA: $504 (200) million *

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