Your county is considering building a public swimming pool. Analysts have estimated the present values of the following effects over the expected useful life of the pool:
PV (million dollars)
State grant:…………………………………………… 2.2
Construction and maintenance costs:……………….. 12.5
Personnel costs:……………………………………… 8.2
Revenue from county residents:…………………….. 8.6
Revenue from non-residents:…………………………2.2
Use value benefit to county residents:……………....16.6
Use value benefit to non-residents:…………………. 3.1
Scrap value:………………………….......................... 0.8
The state grant is only available for this purpose. Also, the construction and maintenance will have to be done by an out-of-county firm.
a. Assuming national-level standing, what are the social net benefits of the project?
b. Assuming county-level standing, what are the social net benefits of the project?
c. How would a guardian in the county budget office calculate net benefits?
d. How would a spender in the county recreation department calculate net benefits?