You are doing an economic feasibility study for a cement project for Country X. It is known that Country X has an OECD risk rating of 4 out of 7, ILO employment multiplier factor of 8, informal sector at 25%, and temporary jobs are estimated at 20%. The LIBOR rate is 0.476%/year. Within the country, cement is subsidized at 30% subsidy rate. The cement FOB price is $250/ton and cement CiF price is $270/ton. The project financial NPV has cement price of $150/ton. The project will employ 108 workers directly. The World Bank reports that Country X s GDP composition by sector is 20% agriculture, 50% industry, and 30% services, whereas GDP composition by employment is 30% agriculture, 40% industry, and 30% services. Cement is classified as an industrial product. Country Xs PPP GDP per capita is $24,650 per year.

Given the above information, derive the following:

a. the true unsubsidized price of cement

b. the shadow price of cement using economic approach

c. explain whether cement is exportable or importable commodity

d. the shadow discount rate e. the shadow wage rate of cement workers in Country X

f. total employment generation from this cement project