The Scenario:

The Government of Ontario has been given a grant from the Government of Canada to help them pay for one of two possible projects. The first project consists of building a high-speed rail from Windsor to Toronto. The second project consists of building various affordable housing units in the cities between Windsor and Toronto. The grant, if it is used, must be used for one of these two projects, not both, but only covers a portion of the cost of either project.

Instructions:

The stream of costs and benefits given are social costs and social benefits for each project. It is your job to write a report as if you were conducting a cost-benefit analysis using the steps you have learned in class. However, this time there are two possible projects. Your report should touch on the following questions: why conduct this CBA (background), who would have standing (assume the government grant is considered a benefit), what are the impact categories, how would you monetize the impacts, what is the net present value of each project, how would you do a sensitivity analysis, what would be your recommendation (concluding notes). The social discount rate for each project is 7.50%. It is recommended that you use the NPV formula in Excel to calculate the Net Present Values