The issue is risk management, not how long a water dam will last.


送交者: skipper3 于 2005-7-22, 16:57:02:

回答: 读了版主的新到文章,提几个意见。 由 特立独行 于 2005-7-22, 14:28:16:

"The world is fundamentally uncertain."

No body knows for certain how many years the dam will keep functioning in a way it was designed to be. When an expert is saying that the dam will last for 50 years he really means the probability of which the dam will fail during the next 50 years is below an acceptable level, say 0.00001%. So I say without a clear definition of the level of exposure to a specific type of risk, and the level of tolerance to such risk, this kind of discussion is going no where.

Regarding operating life cycle of an investment project such as a water dam, there is no use of talking about anything beyond 50 years. This is because even the dam will be broken 50 years later, the amount of cost incurred to fix it and to keep it functioning will be negligible in today's term, no matter how high such cost will be. So I say a 50-year operating life cyle of a dam is good enough, and a 100-year cycle is more than necessary.

For the same why many houses built in NA are intended to last for 30 years or so. As long as you still own the land, the cost of completely rebuild this house will be very small in present terms, therefore there is no need to spend more money today to make the house more durable. This SuanZhang principle is also the reason why we don't have mortgage term longer than 35 years: the monthly payment will be little different if the term is longer.



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