The ogallala aquifer is a large underground pool of fresh water under several western states in the united states. any farmer with land above the aquifer can at present pump water out of it. we might expect thata over time, the aquifer is likely to be overused. b each farmer has a sufficient incentive to conserve the water. c state governments have an incentive to insure that their farmers do not overuse the water. d resources would be used more efficiently if the government paid for the pumps farmers use to get the water.

On january 2, 2016, twilight hospital purchased a $94,800 special radiology scanner from bella inc. the scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. the straight-line method of depreciation is used on this scanner. annual operating costs with this scanner are $106,000. approximately one year later, the hospital is approached by dyno technology salesperson, jacob cullen, who indicated that purchasing the scanner in 2016 from bella inc. was a mistake. he points out that dyno has a scanner that will save twilight hospital $26,000 a year in operating expenses over its 3-year useful life. jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. the hospital agrees that both scanners are of equal quality. the new scanner will have no disposal value. jacob agrees to buy the old scanner from twilight hospital for $40,500. if twilight hospital sells its old scanner on january 2, 2017, compute the gain or loss on the sale. prepare an incremental analysis of twilight hospital.