Question: A county is considering building a composting facility to reduce food waste. Analysts have estimated the present values of the following over the expected useful
A county is considering building a composting facility to reduce food waste. Analysts have estimated the present values of the following over the expected useful life of the facility:
| Monetized Effect | Social CBA | Social CBA | Guardian | |
|---|---|---|---|---|
| Category | (million dollars) | National Standing | County Standing | County Standing |
| Fedral Grant | 2.0 | |||
| Construction Costs | 2.5 | |||
| Food waste collection containers and personnel (facility operators, food waste/ garbage collectors, | 3.0 | |||
| Collection fees from county residents | 6.5 | |||
| Facility operation and maintenance costs | 2.2 | |||
| Use value to county residents | 10 | |||
| Use value to non-residents | 3.1 | |||
| Salvage/ Scrap value | 0.3 | |||
| Net Benefits (million dollars) |
The federal grant is only available for this purpose. Construction, maintenance, and personnel costs will be done by a firm in the county.
a. (5 points) Assuming national-level standing, classify each item as benefit or cost and then calculate the social net benefits of the project.
b. (5 points) Assuming county-level standing, classify each item as benefit or cost and then calculate the social net benefits of the project.
c. (5 points) Assuming county-level guardian standing, classify each item as benefit or cost and then calculate the social net benefits of the project.
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