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Please written by computer source You may treat the SS you found in the previous question (1,387,500) as the annual real net benefit from building

Please written by computer source You may treat the SS you found in the previous question (1,387,500) as the annual real net benefit from building the power plant. To finish this problem assume: Benefits and costs are paid throughout the year. There is a 30,000 (in real terms) operating cost per year. The nominal cost rate 6.5% The expected inflation rate is 2.5% Cost of the plant is paid immediately At the end of the 5th year the plant is worthless. It would cost more to dismantle and sell it than it would fetch in price. The city does not need to build a power plant. It could invest that money. (a) What should the city do? Build a power plant or invest the funds?

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