You do not need to solve question five!

Assume that the government has a choice now between undertaking the project described in question 5, and undertaking a larger project. If it spends an additional $100,000 returns will be increased by $25 000 per year and disposal costs in the final year will increase by $20,000. Which project should be undertaken if the discount rate is 0? 10 percent? 15 percent? In the case where there are two groups in the population, how are your answers affected if two-thirds of the incremental benefits go to the poor (with the incremental costs being shared equally, as before)?

Question 5 described as follow: A workshop designed to retrain workers 55 years of age and older who have lost their jobs is proposed. Suppose the workshop will increase the income of each participant by $1,000 per year for a period of 10 years. a. Calculate the present value of the increased income per participant with each of the following discount rates: 0 percent, 1 percent, 3 percent, 5 percent, and 10 percent. b. If the cost per participant is $8,000 and all those costs are incurred in the first year, at what discount rates will the benefit-cost ratio of the project exceed 1?