2) The World Bank is considering an application from the country of Equatoria for a large dam project. Some of the costs and benefits of the project (dollar values) are as follows: i) Construction costs: $500 million per year for three years ii) Operating costs: $50 million per year iii) Hydropower to be generated: 3 billion Kilowatt hour per year iv) Price of electricity: $0.05 per kilowatt hour v) Irrigation water available from dam: 5 billion gallons per year vi) Price of irrigation water: $0.02 per gallon vii) Agricultural product lost from flooded lands: $45 million per year viii) Forest products lost from flooded lands: $20 Million per year There are also additional, less easily quantifiable, losses: human costs to villagers who will be forced to move, watershed damage, and ecological costs of habitat destruction. The new lake area may contribute to the spread of water-borne diseases. a) Do a formal cost-benefit analysis encompassing all of the quantifiable factors listed above. Assume that the lifespan of the dam is 30 years. As in the example in class, assume that construction begins now (in year 0). All other impacts start once the dam is completed (in year 3) and continue for 30 years (until year 32). Make all the calculation in Excel (refer to the instruction # 1). Use two possible discount rates: 10 percent and 5 percent. For each rate, what is the present value of the dam's benefits and costs? What are your policy recommendations for each discount rate? Remember that there are also unquantified impacts