An electric power wholesaler is considering investing $1.3B in the construction

Question

An electric power wholesaler is considering investing $1.3B in the construction of a low head (low depth of water) hydroelectric facility on a mature river. The proposed facility will make use of turbines that require an upstream depth of water of at least 15 Ft in order to produce power. Actuaries employed by the electric wholesaler have developed policy for the company that states the company will not undertake a venture that contains uncertainty unless there is at least 95%, confidence that the venture will succeed.

Explanation / Answer

For estimate the probability that the depth of water upstream of the turbine will less than 15 Ft, required to know that mean and standard deviation of the upstream depth. So, the correct answer is

b) Can't tell- not enough information.

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