Hyde Park Elementary has plans to build a new playground in 2017. They received a $120,000 government grant to be used for building the playground.

The costs for installation, resurfacing, landscaping, and soil removal are the costs quoted by professional contractors. Sonya was approached by the president of the student council, Josh Schwinn, who has volunteered the council's time for installing and landscaping the new playground. This will save the school approximately $25,000 in costs and Sonya has decided to accept this offer as two of the council members who will be helping are journeymen carpenters. 

The school has two options in terms of dealing with the contaminated soil. The first option is to not partake in the soil testing and to simply resurface the play area with a poured-rubber matting that can cover the entire play surface. This will cost, as Sonya indicated in her estimates above, approximately $55,000 - a large chunk of the playground budget. The other option is to perform the soil testing. A municipal worker has estimated that there is a 40% chance that the soil is contaminated. If this is the case, the school will either need to resurface the area for $55,000 or it can have the contaminated soil removed and replaced for a hefty cost of $73,000 plus the cost of gravel. However, there is a 60% chance that the soil will not be contaminated. Sonya is wondering what they should do and has asked for your help.  

REQUIRED

Prepare an analysis of the potential project costs for the following scenarios. Note: There is no need for gravel in the resurfacing scenario.

1. Resurface ground without doing soil testing (5 marks).
2. Complete the soil testing.In this case there are two outcomes:   remove/replace the soil if contaminated & resurface if contaminated.