1. 50pts. Complete the following problem: Your state is considering building a public basketball court. Analysts have estimated the present values of the following effects over the expected useful life of the court:

The federal grant is only available for this purpose. In addition, the construction and maintenance will be done half by an in-state firm and half by an out-of-state firm.

a. Assuming national-level standing, what are the social net benefits of the project?

b. Assuming state-level standing, what are the social net benefits of the project?

c. How would a guardian in the county budget office calculate net benefits?

d. How would a spender in the county recreation department calculate net benefits?

Federal grant 2.7

Construction and maintenance costs 10.5

Personnel costs 8

Revenue from state residents 10.9

Revenue from non-residents 2.5

Use value benefit to state residents 12

Use value benefits to non- residents 4

Scrap value 2.1