5. Suppose that the government of Aqualand is considering a new law that would improve drinking water quality. e cost of complying with the new regulation is $100 million. e benefits of improved drinking water are estimated to be $250 million, but these benefits will occur 25 years from now.

a. At a discount rate of 5 percent, do you recommend that Aqualand institute this new regulation?

b. Would your recommendation ange if the discount rate were 3 percent?