looking for answers for Q 1-3

In problem 1, nearly all the answers included the multiple (.2). If this multiple should be included, the most likely reason is that 1) not all the locals will use the bridge. 2) vehicles crossing the bridge will emit pollution. 3) the locals will have to raise their taxes to pay for the bridge. 4) not all the money spent on the bridge will be spent on goods and services provided by the locals. 5) locals give up costly goods and services to get the money they are paid for the construction. 6) The multiple (.2) should not be included in the estimate of the locals' benefit from the bridge construction. The locals receive the net generated income from construction in problem 1 just once. We can annualize it in order to compare it to user benefit that they receive every year. This annualization can be done by 1) multiplying the one-time net generated income by the interest rate. 2) multiplying the one-time net generated income by the multiplier. 3) multiplying the one-time net generated income by the profit share. 4) multiplying the one-time net generated income by the number of years the bridge is expected to last. 5) dividing the one-time net generated income by the number of years the bridge is expected to last. 6) none of the above. Suppose the federal government pays $200M ( M for million) to have a bridge built in a city. The city has normal economic activity and an unemployment rate of 4%. The real (inflation adjusted) annual interest rate is 4%. Half of the $200M spent on the bridge construction is paid to city businesses. The rest is paid to outsiders for engineering and imported construction materials. The value of the benefit (net generated income) city residents (locals) get from the bridge construction alone (ignoring any benefit they get by using the bridge after it is built) is probably closest to 1) ($100M(.3)(200M))(.3)(.2)=$2.4M 2) ($100M(.3)(100M))(.3)(.2)=$4.2M 3) ($100M(.3)(200M))(1)(.2)=$8M 4) ($100M(.3)(100M))(1)(.2)=$14M 5) ($100M(.3)(200M))(2)(.2)=$16M 4) ($100M(.3)(100M))(1)(.2)=$14M 5) ($100M(.3)(200M))(2)(.2)=$16M 6) ($100M(.3)(100M))(2)(.2)=$28M 7) $100M(.2)=$20M 8) $100M(2)(.2)=$40M 9) $200M(2)(.2)=$80M 10) $100M