MGT 5064 Week 1 Assignment 2

MGT 5064 Week 1 Assignment 2 | Florida Institute Of Technology  | Assignment Help 

Homework 2 on Chapter 1 Introduction to CBA.docx

Exercise_1_3 Excel Worksheet.xlsx

To answer the last question (problem set), use the Excel Worksheet above and enter a value for each impact category depending on the standing (columns).  For example, state grant will have a zero entry under the national standing because money is coming from the "national budget" and going to the state which is also part of the nation.  Therefore, benefits and costs cancel out.  With county standing, the county will view state grant as benefit for the county as funds are coming from "outside the county" so you will enter 2.2 for state grant under county standing.  The guardian will see state grant as money coming in (benefit).  The spender will also view this as a benefit to its constituents and therefore, enter 2.2 for state grant under the Spender standing.  They tend to regard social benefits and monetary payments received by their constituents as benefits.

The solutions video is already posted and so I expect you to view it and provide the correct answers.

 Homework 2

Reading and Homework              

Chapter 1 Introduction to Cost-Benefit Analysis

Read Chapter 1 notes (on CANVAS under ‘Files’), view the class lecture recording for Chapter 1 and the solutions video for this homework, and then answer the following questions completely. You can use this Word file and type your answers under each question.

1.      What is a CBA?

2.      Explain the arguments against the use of CBA.

3.      What is the purpose of using a CBA?

4.      Differentiate the types of CBA (ex-ante, in medias res, ex post, and comparative CBA).

5.      List and explain the basic steps in conducting a CBA.

6.      a. On the Coquihalla Highway CBA example, what are the two alternatives considered?

b.      Whose benefits and costs count (standing)?

c.      List down the benefit impact categories and the cost impact categories.

7.      Explain how to calculate the NPV (net present value) of an alternative. What is the decision rule for adopting a project?

8.      Differentiate and explain the perspectives of a guardian, a spender, and a CBA analyst.

9.      What are the consequences of the guardian perspective?

10. Answer Exercise 1.3 (Chapter 1- Exercise 3). A spreadsheet that you can use for Exercise 1.3 is available on CANVAS under ‘Files’. 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 nonresidents:                                                          2.2

Use value of benefit to county residents:                                    16.6

Use value benefit to nonresidents:                                                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 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?

Instructions for submitting an assignment:

All work must be typed using Times New Roman or Calibri, 12 points font, must be double spaced and must be submitted in MS Word; work submitted in any other format will not be graded. Submit your answers using the CANVAS setting for Homework 2. Submission bin will close after the due date and emailed assignments will not be accepted.

File name: LASTNAME_FIRSTNAME_Homework 2 on Chapter 1