Question: Use a 40 year time horizon (t = 0, ..., 39) and a 2% discount rate. The playground for children at a park is going
Use a 40 year time horizon (t = 0, ..., 39) and a 2% discount rate. The playground for children at a park is going to be expanded. The playground expansion will cost $159,000 to build today (t = 0). Assume the playground expansion can be built quickly, so the children can also start using it at t = 0. The area of playground that already exists is 54 square meters, and after the expansion the total area of playground will be 188 square meters. Aggregate demand per year for the playground is given by P= 110 - 0.5Q, where Q measures square meters. Calculate the net present value of the new playground A small margin of error will be accepted but maintain several significant digits during your calculations
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