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LASA 2/2 - Assignment Example

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The Case For, or Against, New Orleans Part A The Economics of New Orleans: New Orleans is one of the main ports of the United States and it is the biggest city in the state of Louisiana. It is a very significant state for the country both financially and economically…
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LASA 2/2
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Download file to see previous pages “The port generated 107,000 jobs, with over $2 billion in earnings. In addition, thirty percent of U.S. seafood came from the Louisiana coast” (Gagne, 2007, p.2). In the year 2004, studies revealed that the tourists spent about $4.9 billion in the city of New Orleans. In the year 2010, leaders opened a master plan with the objective of attracting almost 13.7 million tourists and creating about $11 billion by the approaching year of 2018. Cost-Benefit Analysis (CBA) for Rebuilding: To assess and provide advice on whether or not to rebuild the New Orleans I will be evaluating the cost and benefits of rebuilding the city as well as the benefits and impact it will have on New Orleans. In the CBA, I will be assessing the cost of rebuilding the city of New Orleans to pre Katrina situations without creating any extra upgrades to the infrastructure and levees. This will provide more accurate cost. I will observe the benefits of improved losses when contrasting the data of pre Katrina to post Katrina situation. The parts that I will be assessing are tourism recovered, wages recovered, port operations recovered, taxes recovered and spending recovered. The future value of these benefits will then be discounted with respect to the present value and later contrasted to the cost of rebuilding to signify the net present value of the possible amount to be lost or gained by working the recovery. If the net profit value is below the cost, after that rebuilding the city of New Orleans will yield a loss and the recommendation will not help a recovery. If the contrary is correct then the proposal will be in support of the recovery. Following is the cost basis analysis: Costs (In Billions) Departments and facilities Cost (in billion $) Transportation cost 17 Agriculture 16 Army Corps of Engineers 12 Atmospheric Administration 5 Defense department 9 Levees to withstand level 5 Hurricanes 35 Government agencies 6 Total Costs 100 The table above shows the cost benefit analysis of the city of New Orleans. The expenses for the category building are 5 flood protection methods, which are estimated to incur around $35 billion. The redeveloping benefit of New Orleans can be mainly divided into three groups that include financial, economic and miscellaneous benefits. The financial part of the benefits contains the cash generated by the city. The main financial benefits discussed here are connected to the funds generated by the port of the city, as these are direct benefits. The economic condition of New Orleans shows huge development due to the flourishing seafood and other trade opportunities. Miscellaneous benefits include the rise in the population as well as the development of the economy of New Orleans, continuation of port business, preservation of coastal wildlife and maintenance of seafood business. Decision Tree and Analysis of its Results: Decision trees are graphical demonstrations of alternative options that may be made by a business and “which enable the decision maker to identify the most suitable option in a particular circumstance” (The Times 100: Business Case Studies, 2013). Following are the assumptions that are to be considered while preparing the decision tree constituents: Probability of occurring Katrina like event is 64% Probability of occurring lower than Katrina is 36% Levees protecting the city raise the risk of nearby regions to 25 %. The new levees ...Download file to see next pagesRead More
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