(20 Marks) The rst cost of a lghway project is $1.5 million. Operating and maintenance costs were estimated at $50 000 per year. There will be zero salvage value of the highway after 20 years. As a result of this project, a recreational facility worth $10 000 per year in benets will be destroyed. Assuming a 4%: social discount rate, what is the breakeven value of time savings In the highway users? How would this value change if social discount rate increased to 10%? 2. (30 Marks} BC Power has just purchased. a $0.5 million turbine. The turbine will allow it to produce 10 000 kilowatt hours (KWH) of electricity per day for twenty years. Afterwards the turbine's scrap value is expected to be negligible. Current price of electricity is $0.06fKWH. Operating costs of the turbine are $100 000 per year. Now BC Power pays a 40% corporate tax rate on its annual income. Depending on the outcome of the provincial elections, it is expected that the tax rate can either increase by 100/0 or decrease by 100/0. Given this information and assuming a 5%. annual interest rate and a 200/0 CCA rate, perform a sensitivity analysis on the company's aftertax protin the turbine's rst year of operation with respect to the expected changes in the corporate tax rate. 3. (15 Marks} Using your own words, explain why managing risks requires information about uncertainty and the likelihood of occurrence of the different outcomes. Describe how this information can be used to reduce the overall risk of a given project