In addition to provide your answer, please include your calculations to receive full credit; and if you use spreadsheets for your calculations, please submit the Excel file together.)

Assume you are a budget analyst at Town of Morehawk and the city is considering an investment in a fishing pier on the coast. One of the piers (Option A) will cost $900,000 to acquire and $15 dollar per person visit for use. The operating cost will be $10 per person per visit.

a. Assume there will be 20,000 person visits per year for the next 10 years, all of the investment will be spent at beginning of the first year, and there is no need for discounting, how long will it take to recover the investment cost?

b. If there is another pier (Option B) that will cost $1,500,000 to acquire and will offer the same ticket price for visitors and incur the same operating cost but with 30,000 person visits per year for the next 10 years, which pier is a better investment option with the same assumption on discounting? Why?

c. For both options above, assume 0.05 discount rate, will your investment choice be the same? Why?

d. If this investment of $900,000 for Option A is financed through a zero-coupon 10-year bond which requires no interest payment before maturity but full payment of principal and all interests at maturity. If the total payment at maturity is $1,200,000, what is the implied annual interest rate of the bond?