Please answer part a

6. (15 marks) You are asked to conduct a benefit-cost analysis to recommend if the local government should undertake a solar electric project in "Site - C" area. A set of costs and benefits is given for a 10-year period. Project 1. Solar Electric Project in "Site-C" Area Costs (thousands of S) Years 6 7 8 9 10 Construction 1250 Recurring costs 130 130 130 130 130 130 130 130 130 130 Foregone recreation 20 20 20 20 20 20 20 20 20 20 20 Benefits(thousands of S) Years 0 1 2 3 4 5 6 7 8 9 10 Increased tourist revenue 300 300 300 300 300 300 300 300 300 300 300 Net NPV @ 5% NPV 10% a. What is the role of discount rate in the benefit-cost analysis of an environmental project? b. Calculate the NPV of the project for the 5% discount rate. Should you recommend the project if the discount rate is 5%? Why or why not? 2