struction: Answer all the questions. 1. The Development is considering a proposal from the Zambian government for a micro dam project. Selected project cost and benefits (dollar values) are as follows: Construction costs: $20,000/ year for 3 years Operating costs: $50,000/ year Hydropower to be generated: 1 million kilowatt hours/year Price of electricity: $0.05/ kilowatt hour Irrigation water available from dam: 5 million gallons/year Price of water: \$0.015/gallon Agricultural product lost from flooded lands: $5,000/ year Active life time of the project is 15 years (for the sake of simplicity) Interest rate is 15 percent Assume that the project incurs no ecological and other costs than stated above. (a) Calculate the NPV. (b) Do you suggest approval/rejection of the project? Explain. 2. A firm is considering a project costing K200, 000 with 3 years economic life and no salvage value. Depending on possible economic condition, the net cash flow and associated probabilities are given below. Considering 12 percent discount rate calculate the Expected NPV