Question
1. 50pts . Complete the following problem: Your state is considering building a public basketball court. Analysts have estimated the present values of the following
1. 50pts. Complete the following problem: Your state is considering building a public basketball court. Analysts have estimated the present values of the following effects over the expected useful life of the court:
The federal grant is only available for this purpose. In addition, the construction and maintenance will be done half by an in-state firm and half by an out-of-state firm.
a. Assuming national-level standing, what are the social net benefits of the project?
b. Assuming state-level standing, what are the social net benefits of the project?
c. How would a guardian in the county budget office calculate net benefits?
d. How would a spender in the county recreation department calculate net benefits?
Federal grant 2.7
Construction and maintenance costs 10.5
Personnel costs 8
Revenue from state residents 10.9
Revenue from non-residents 2.5
Use value benefit to state residents 12
Use value benefits to non- residents 4
Scrap value 2.1
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