A country's football association is considering whether to bid to host the World Cup in 2026. Several countries aspiring to host the World Cup will be making bids. Regardless of whether the bid is successful, the association will incur various costs. For two years, starting on 1 January 2012, the association will incur costs at a rate of 2m per annum, assumed to be paid continuously, to prepare the bid. the football association is successful the following costs will be incurred from 1 January 2016 unta 31 December 2026: One stadium will be built each year for ten years. The first stadium will be built in 2016 and is expected to cost 200m; the stadium built in 2017 is expected to cost 210m; and so on, with the cost of each stadium rising by 5% each year. The costs of building each stadium are assumed to be incurred halfway through the relevant year. Administration costs at a rate of 100m per annum will be incurred. payable monthly in advance from 1 January 2025 until 31 December 2026 Revenues from television, ticket receipts, advertising and so on are expected to be 3.300m and are assumed to be received continuously throughout 2026 Explain why the payback period is not a good indicator of whether this project is worthwhile. The football association decides to judge whether to go ahead with the bid by calculating the net present value of the costs and revenues from a successful bid on 1 January 2012 at a rate of interest of 4% per annum effective. [3] Die Determine whether the association should make the bid. (13) The football association is discussing how it might factor into its calculations the fact that it is not certain to win the right to host the World Cup because other countries are also bidding. CG) Explain how you might adjust the above calculations if the probability of winning the right to host the World Cup is 0.1 and whether this adjustment would make it more likely or less likely that the bid will go ahead. (3) [Total 19)