Question 3: (10 marks) A developer is planning a new housing development project with the following financial costs and revenues. There will also be a stream of public costs generated: Year Costs ($Mill) Revenues ($Mill) Public costs ($Mill) 0 77 0 3 27 24 25 26 W N 20 27 17 28 10 29 6 -20 5 7 (a) What do you mean by pay-back period and identify the pay-back period of this housing development project (2 marks) (b) What is the difference between financial return and net financial return? Estimate the net financial return at discount rates of 5% and 7% of the above project. (3 marks) (c) Estimate the net present value (NPV) when public costs are considered at discount rates of 5% and 7%. (3 marks) (d) Explain with examples why it is important to identify the net benefits of projects to society rather than to private developers. (2 marks)