Suppose the Queensland Government is considering a project where COVID vaccinations can be provided to the general

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Question:

Suppose the Queensland Government is considering a project where COVID vaccinations can be provided to the general public within a popular shopping centre. The project is expected t last 5 years, with an initial investment cost of $10,000. The ongoing cost of the project is $1,500 in rent and 6 casual workers who administer vaccinations for 60 hours each, per year at a minimum wage of $15/per hour. The opportunity cost of labour in the area is 40% of the minimum wage.

The Government is considering charging $5.50 per vaccination and is expected to administer 1,650 vaccinations per year from this program. It has also been determined that the program will provide an external community benefit of $750 per year. If the appropriate discount rate is 5%, determine the following:

a) The NPV of the Market CBA = $

b) The IRR of the Market CBA = $

c) The NPV of the Efficiency CBA = $

d) The total discounted External benefit is = $

Explain in detail whether the Qld Government should accept/reject this project = (write accept/reject in the box and provide a detailed response in your spreadsheet).