Please answer the questions attached to this section.

Group 10 01 Q2 Q3 Q4 Information for answering questions 1-3 below. Questions for 1-3 Ethiopia is currently considering putting in place a disease free zone where animals can be held and observed for six weeks. Animals held for this length of time in the zone are eligible to be exported to Saudi Arabia. If an animal does notgo through this process, it is not allowed to be exported internationally and is sold domestically. The value ofan animal in Saudi Arabia is twice what it is worth in Ethiopian markets that is a bull that sells for $150 USD in Ethiopia is worth $300 if exported to Saudi Arabia. It will cost us 20 million USD in t=0 to build the disease free zone. During year zero, animals will be marketed domestically so domestic revenue and costs will apply. In years t=1, t=2, and t=3 it will cost us 5 million per year to provide veterinary goods and services to establish the disease free zone and 10 million per yearto buy feed for animals held in the zone and animals will be marketed in Saudi Arabia. Production for the domestic market currently has 2 million per year spent on veterinary goods and the implicit cost of feeds consumed by domestically marketed animals is estimated to be 5 million per year. Revenue per year of selling animals domestically is 15 million. The same animals sold in Saudi Arabia are worth 30 million. The discount rate is 10% Question 1 A) What is the net present value of producing for the domestic market? Present Value in millions Select one: a. $75.3 b. $7.8 c. $19.0 d. $27.9 e. $32.0 Question 2 B) What is the net present value of building the disease free zone and selling in Saudi Arabia? Select one: a. $-14.5 b. $17.2 c. $25.3 d. $32.3 e. $42.2 Question 3 C) Which is preferable in NPV terms? Select one: a. Domestic b. Export Market Information for answering questions 4-8 Studies have shown that placing trained nutrition monitors in local clinics leads to lower child malnutrition rates in your country. Studies also show that improved school feeding programs lead to lower child malnutrition in your country. Two proposals are on your desk, each designed to reduce the child malnutrition rate in your country by 1% per year. You only have enough operating funds to do one, and you can't combine themit is pick one or the other. Placement of nutrition monitors: This is a three-year program to hire and place in local clinics the nutrition monitors. Start-up recruitment and hiring is year zero, year one the monitors are in place working, year two the monitors are in place working, then the project phase ends. It will cost $450 million in year zero to hire and place these monitors, and will cost$125 million in year 1 and $150 in yeartwo to pay their salaries. School feeding: This is also a three-year program. Start-up and organization in year zero costs $150 million. Feeding costs in year t=1 is estimated to be $200 million and year t=2 is estimated to be $400 million. Question 4 If the discount rate is 10%, what is the present value cost of nutrition monitors? Select one: a. $750 b. $725 c. $721 d. $713 e. $688 f. $662 g. $650 Q 5 Question 5 If the discount rate is 10 % , what is the Present Value Cost of the school feeding program? Select one: a. $750 b. $725 c. $721 d. $713 e. $688 1'. $662 g. $650 Q 6 Question 6 If the discount rate is 3%, what is the Present Value Cost of the nutrition monitors? Select one: a. $750 b. $725 c. $721 d. $713 e. $688 f. $662 g. $650 Q 7 Question 7 If the discount rate is 3%, what is the Present Value Cost of school feeding? Select one: a. $750 b. $725 c. $721 d. $713 e. $688 f. $662 g. $650 Q 8 Question 8 Explain why the least cost program changes when the discount rate changes. Answer: Q9 Match the formula to the name associated with the formula 1- Benefit T (:05: A) Er=o (1+rJ't 2r=o (Hat: 1 T Benefit 2 t=0t_:(1+r) East ZZ= ow? Benefit, __. 1- Cost: C) The rthat makes 2:;0 1+r t t= 1+r I Choose A, B, or C above to the answer the three questions below. Questions Answer Internal Rate of Return Net Present Value Benefit Cost Ratio Q10 Question 10 Is this statementTrue or False? Nominal values are presented in inflation adjusted units. Select one: TRUE FALSE Q 11 Question 1. Is this statement True or False? Tax payments are treated as costs in Benefit Cost analysis. Select one: TRUE FALSE Q 12 Question 12 Is this statement True or False? The Value of a Statistical Life used by the US Department of Transportation is currently between $90,000 and $100,000. Select one: TRUE FALSE Q 13 Question 13 Is this statement True or False? Select one: TRUE FALSE Q 14 Question 14 Is this statement True or False? Expected Value = (probability of being in state of the world A)*(value of being in state of the world A)+ (probability of being in state of the world B)*(value of being in state of the world B) Select one : TRUE FALSE Q 15 Question 15 Is this statement True or False? To evaluate a policy, we contrast the predicted future with the policy with the predicted future without the policy. Select one: TRUE FALSE