Mountain Stat

Mountain States Electric Service is an electrical usefulness order serving several states in the Rocky Mountain region. It is considering inheritor some of its equipment at a generating substation and is attempting to decide whether it should replace an older, authorized PCB transformer. (PCB is a toxic chemical known formally as polychlorinated biphenyl) Even though the PCB generator meets all current regulations, if on misadventure occurred, such as a excitement, and PCB contamination caused invade injury either to neighboring businesses or farms or to the environment, the give- harvest mite would be liable for damage. Recent court cases have shown that plainly contact utility regulations does not relieve a utility of obligation if an incident causes harm to others. Also1 courts have been awarding behavior-size damages to individuals and businesses harmed by hazardous incidents. If the utility replaces the PCB transformer, no PC incidents al secondary occur, a nd the only cost provide be that o the transformer, $85,000. Alternatively, if the corn pony decides to keep the alert PCB transformer, thence management estimates thither is a 5050 view of there beingness a high likelihood of an incident or a low likelihood of an incident. For the case in which there is a high likelihood that an incident ordain occur, there is a 0.

004 prospect that a fervour volition occur erstwhile(prenominal) during the remaining life of the transformer and a 0.996 opportunity that no fire depart occur. If a fire occurs, there is a 0.20 probability that it give be bad and the utility will perplex a very high cost of close to $90 million for the cleaning, wh ereas there is a 0.80 probability that the f! ire will be minor and a cleanup good deal well-behaved at a low cost of virtually $8 million. If no fire occurs, then no cleanup be will occur. For the case in which there is a low likelihood of an incident occurring, there is a 0.00 1 probability that a fire will occur during the life of the existing transformer and a 0.999 probability that a fire will not...If you destiny to get a full essay, order it on our website: OrderEssay.net

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