Answer what you can

1. Suppose that fixing 300 feet of Hwy 50 costs $1M (in present value) if you start it today. Set up and solve the equation to find the PVC savings of delaying it by 3 years @ 10% discount rate.

2. Maui Wowie Canabis, a new Sacramento dispensary, has a net benefit of $10 million this year that is expected to grow at 2% per year forever. Maui Wowie uses a discount rate of 7%. What is Maui Wowie Cannabis's company worth?

3. East Lawn Memorial Park Cemetery (at Folsom Blvd. and 43rd Street) is considering a new grave digging machine that costs $500,000 for a three-year lease. As a result, East Lawn expects revenue to increase $210,000 in Year 1, $237,000 in Year 2, and $265,000 in Year 3. The rate of return on another project is 6%.

a) Set up the problem b) What is the net present value of the East Lawn Digger?

4. Who should be included in the definition of society when one considers equity and efficiency? Why?

5. Describe a problem that requires a numerical comparison of two mutually exclusive projects that have two different life expectancies. Then set up the solution mathematically without calculating the final numerical results.