3. Instructor-provided spreadsheet recommended New City is considering building a recreation center. The estimated construction cost is $12 million with annual staffing and maintenance costs of $750,000 over the 20-year life of the project. At the end of the life of the project, New City expects to be able to sell the land for \$4 million, though the amount could be as low as \$2 million and as high as \$5 million. Analysts estimate the first-year benefits (accruing at the end of the year of the first year) to be $1.2 million. They expect the annual benefit to grow in real terms due to increases in population and income. Their prediction is a growth rate of 4 percent, but it could be as low as 1 percent and as high as 6 percent. Analysts estimate the real discount rate for New City to be 6 percent, though they acknowledge that it could be a percentage point higher or lower. [4] a) Calculate the present value of net benefits for the project using the analysts' base case predictions. [4] b) Investigate the sensitivity of the present value of net benefits by calculating the best and/or worst case scenario, or any other alternative predictions within the range given by the analysts. [2] c) Given your calculations in a) and b), should New City build the recreation center? Explain