3. An intervention has the following costs and benefits

Yr 1 Yr 2 Yr 3

Benefits 1000 4000 3000

Costs 4000 1000 1000

a. Calculate the net benefits assuming no discounting

b. Calculate net benefits assuming a 5% discount rate

c. Does a higher rate of discount make this intervention seem more or less attractive? Why?

4. A public health official is considering expanding the number of health clinic in an area. The official has information on the following costs and benefits of expanding the number of facilities:

Number of new facilities Costs Benefits

1 50,000 80,000

2 90,000 160,000

3 140,000 230,000

4 200,000 280,000

5 280,000 320,000

a. How many new facilities should be created? Explain