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### Abstract

This paper examines the economic feasibility of Lostock Dam on the Paterson River, N.S.W. under a number of assumptions as to the resulting quantity and type of additional output. It is shown that the dam has a benefit-cost ratio greater than one only when the additional water is fully utilized and the discount rate is 5 per cent. However farmer estimates indicate that only a proportion of the extra water will be used, in which case the benefit-cost ratio is less than 0.1.