Economic Benefits from Oceanographic Research (1964) / Chapter Skim
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Benefits and Costs
Benefits and Costs
Pages 7-12
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From page 7... ...
To judge the value of oceanographic-research expenditures in comparison with other possible ways of employing the same money and human effort, we must reduce the anticipated future economic benefits to their "present worth," that is, their value at the time the research is carried out. This is equal to the immediate return on an investment at compound interest that would yield the same future return as the research.
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From page 8... ...
Long- Improve long range 2,000 1 ~600 Range weather forecasts through Weather improved understanding Forecasting of air-sea interactions 5. Near- Reduce treatment-plant Shore costs by better estimates Sewage of receiving capacity of Disposal coastal waters (a)
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(12) Total Benefits Total Portion of DiscountedAverage Allocated Research Value of AverageAnnual to Research Expenditures Annual Benefits Costs of Discounted Discounted Discounted Allocated to Oceano- Value to the to the Oceanographic graphic Divided Present Present Benefit/ Research Research by Costs Time Time Cost Millions Millions of Dollars of Dollars Millions Millions Per Cent per Year per Year (S)
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v, au · - ~ Q o ·_' o o en o V)
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From page 11... ...
The sum of the allocations to a particular area is given in Table 1 as the annual cost of the research that will produce the indicated annual economic benefit. The total of all these costs is 166 million dollars, whereas the average annual expenditures contemplated in the 10-year National Oceanographic Program, plus the Navy's oceanographic expenditures outside the program, are 280 million dollars.
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From page 12... ...
It will be seen that these are higher than the ratios obtained if the benefits and costs are discounted to the times when the research is done. For example, the average benefit-cost ratio computed by this method of discounting is 4.4, compared with 3.2 by the previous method.
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