Due to the drought, farmers in California have substituted groundwater for curtailed surface water deliveries, and groundwater levels have fallen dramatically Suppose that the state could implement a groundwater action plan, but to do so the state would need to set aside $500 million in the initial year for administration costs and programs that would help compensate farmers for agricultural losses while they work to shift the crop mixes grown in the state. Savings from the new management are accrued in each year. Year Groundwater regulation Costs (administration and decreased farm revenues) Benefits/Savings from new regulations (decreased costs of groundwater pumping + nonmarket benefits of higher groundwater levels) 0 $500M $10 M 1 $40 M 2 $100 M 3 $150 M 4 $250M Totals $500M $550 M 1) If the discount rate is 4%, does the groundwater management test have a positive ration of benefits to costs? Show your work.