Question 4: Discounting and Net Present Value 4. (10 pts) Use the following table from the Office of Management and Budget (OMB) to apply the appropriate, inflation-adjusted discount rate to determine the Net Present Value (NPV) of the proposed project. Please use an Excel file and include the file as part of your Problem Set submission. Discount 3-Year 5-Year 7-Year 10-Year 20-Year 30-Year Rates Nominal 4.0% 3.8% 3.8% 3.9% 4.2% 4.2% Real 1.2% 1.3% 1.4% 1.5% 2.0% 2.0% NPV Worksheet Year since Expected yearly Discount PV of costs PV of benefits Expected yearly initiation, renewal benefit factors for cost or expansion x% (1) (2) (4) (5) (6) 1 $2,330.00 $0.00 $4,662.00 $0.00 $6,994.00 $1,250.00 U A W N $6,994.00 $2,500.00 $4,665.00 $7,500.00 6 $2,336.00 $10,000.00 $1,172.00 $10,000.00 6 / 00 V $1,172.00 $10,000.00 $1,172.00 510,000.00 10 $1,172.00 $6,250.00 End of Project a. Choice of correct discount rate (2pt) b. Fill out column 4 (2 pts) C. Fill out column 5 (2 pts) d. Fill out column 6 (2 pts) e. What is the NPV of the project? (2 pts)