Question

In the late 1970s, there was a major controversy over a dam built by the Tennessee Valley Authority called the Tellico Dam, which is located near the mouth of the Little Tennessee River. After construction was completed and almost all of the land purchases (or evictions) had been done, the Supreme Court ruled that it could not go on because of the presence in the Little Tennessee of a fish on the endangered species list called the Snail Darter. (Congress later voted to exempt the dam from the law and the dam was closed in the late fall of 1979, creating Tellico Lake.) While the economic benefits of the dam were admittedly dubious, one of the common arguments for completing the project was this: "We have spent more than $100 million to build this dam. We need to complete it because we will have wasted all this money otherwise." Please evaluate this argument from an economic point of view.

Answer 1

Any general public or government when dispatches huge advancement venture, they expect to bridle more noteworthy cultural advantages. They expected to ensure that cost and advantage examination of venture should come to be net positive. Being developed period of these sort of task each of the three economies (the commercial center economy, the economy of nature and the community and cultural economy) ought to be kept in domain however Tennessee Valley Authority's (TVA) Tellico Dam venture needed farsightedness and legitimate arranging. With this task commercial center economy utilized solid limited time activity to push the undertaking without thinking about cultural systems for open bookkeeping and sane oversight. Presently contention that as venture has just devoured $100 million and we have to finish it in any case the general speculation is squandered, itself has fundamental blemish of monetary advantage. Any asset's future worth ought to be reflected from its current incentive for evaluating its future worth for continuation however Tellico dam's current worth was not as much as its complete expense, henceforth it was anything but a monetarily advantageous venture. For contention if venture is proceeded and more cash is contributed, it will boost the misfortune as opposed to profit as undertaking was at that point at misfortune. As it were, putting resources into an undertaking with high sureness of disappointment is viewed as financial self destruction and wastage of assets.