3.1 Part A: 60 Marks Problem 1 What control option should the municipality choose? Defend your answer by computing the present value of the net benefits for each control option. Show how you obtained your results, using graphs, formulas and all computational work. Excel spreadsheet models are acceptable as long as you include an explanation of any discounting formulas etc. that are used in the spreadsheet. No marks will be given for answers that do not show how the calculations were derived. (60 marks for this section) 3.2 Part B: 40 marks Based on your analysis answer the following questions. Each answer should be explained and also contain numerical simulations to support your answer. Each question is worth 10 marks. Problem 2 How does the value of the discount rate affect the calculation of the net benefits of each option? Try interest rates of 5%, 10% 15%. Problem 3 Suppose the treatment plant lasts for 10, not 5 years before it needs to be replaced. Using the discount rate of 12% Compute the present value of net benefits if this is the case