# Question: A cost benefit analysis of a new irrigation project indicates that

A cost-benefit analysis of a new irrigation project indicates that the net benefits (B C) of the project in each of the first four years will be $2 million.

Thereafter, the project will yield positive net benefits of $750,000 for the next 20 years. Calculate the present value of benefits minus costs when the social rate of discount is 10 percent. You can use spreadsheet software to do this calculation. Does the program merit approval? How would the present value of the net benefits change if the social rate of discount were 15 percent?

Thereafter, the project will yield positive net benefits of $750,000 for the next 20 years. Calculate the present value of benefits minus costs when the social rate of discount is 10 percent. You can use spreadsheet software to do this calculation. Does the program merit approval? How would the present value of the net benefits change if the social rate of discount were 15 percent?

**View Solution:**## Answer to relevant Questions

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. ...Get the directions for the Federal Income Tax or go to http://www.irs.gov to obtain the tables for the EITC for the current year. Explain how the program increases earnings for low-income workers and affects their ...Use the graph from Problem 2 to show the loss in efficiency that results from third-party payments. Show how the loss in net benefits from overallocation of resources to health care can be reduced by increasing coinsurance ...Figure 11.11 shows that a tax on clothing can reduce the price of food. Suppose that after the tax on clothing consumption is imposed, another tax is levied on the consumption of food. For example, the consumption of both ...An estimate of the efficiency-loss ratio of taxes on labor income is 15 percent. The efficiency-loss ratio of taxes on capital income is estimated to be 45 percent. Assuming that these estimates are accurate, calculate the ...Post your question