Assessing Storm risk costs
Assume Ò100-year stormÓ will require trestle bridge to be replaced.
Such a storm would occur with a probability of 0.01 that in any year the bridge will be destroyed.  Using binomial probability tables for n = 50 and p = 0.01, we find the probability of having any number of floods during the next 50 years

Probability                  Number of Ò100-year stormsÓ
     0.600
     0.311
     0.082
     0.013
If a storm occurs during next 50 years, the additional cost incurred would be an extra $80,000 (unless storm occurs happens to occur in the year in which the bridge was schedule to be replaced, and an additional negative benefit of $90,000 for each month the region is without the bridge.

Costs depend on years (time) in which the storm(s) occur(s).
Estimate the PV of the additional costs by averaging its time of occurrence.