Table & parts A-D.
Complete the following problem: Your state is considering building a public basketball court. Analysts have estimated the present values of the following effects over the expected useful life of the court: PV (million dollars) Federal grant Construction and maintenance costs Personnel costs Revenue from state residents Revenue from non-residents Use value benefit to state residents Use value benefits to non-residents Scrap value 2.7 10.5 8 10.9 2.5 12 4 2.1 The federal grant is only available for this purpose. In addition, the construction and maintenance will be done half by an in-state firm and half by an out-of-state firm. a. Assuming national-level standing, what are the social net benefits of the project? b. Assuming state-level standing, what are the social net benefits of the project? C. How would a guardian in the county budget office calculate net benefits? d. How would a spender in the county recreation department calculate net benefits? State Basketball Court PV (Mils) Social CBA (national) Social CBA (state) State (guardians) State (spenders) 1 2.7 10.5 2 3 Impact Item Federal grant Construction and maintenance costs Personnel costs Revenue from state residents Revenue from non-residents Use value benefit to state residents Use value benefits to non-residents Scrap value Net Benefit (million dollars) S 6 8 10.9 2.5 12 4 2.1 n/a 7 8 Complete the following problem: Your state is considering building a public basketball court. Analysts have estimated the present values of the following effects over the expected useful life of the court: PV (million dollars) Federal grant Construction and maintenance costs Personnel costs Revenue from state residents Revenue from non-residents Use value benefit to state residents Use value benefits to non-residents Scrap value 2.7 10.5 8 10.9 2.5 12 4 2.1 The federal grant is only available for this purpose. In addition, the construction and maintenance will be done half by an in-state firm and half by an out-of-state firm. a. Assuming national-level standing, what are the social net benefits of the project? b. Assuming state-level standing, what are the social net benefits of the project? C. How would a guardian in the county budget office calculate net benefits? d. How would a spender in the county recreation department calculate net benefits? State Basketball Court PV (Mils) Social CBA (national) Social CBA (state) State (guardians) State (spenders) 1 2.7 10.5 2 3 Impact Item Federal grant Construction and maintenance costs Personnel costs Revenue from state residents Revenue from non-residents Use value benefit to state residents Use value benefits to non-residents Scrap value Net Benefit (million dollars) S 6 8 10.9 2.5 12 4 2.1 n/a 7 8
