An NGO is considering building a school for children in a community with 200 children. Assume that currently, only 83 children attend school. Analysts have estimated that the new school will double school attendance to 166 children. Also, assume that the present social value of each child attending school is $2,000. If the project requires an initial investment of $50k plus an additional $15k per year after the first year until it is completed, and if it takes 4 years to complete, what is its SNPV at a PDR of 7%? Assume that the construction imposes a negative externally of $7k a year due to noise and pollution. Also assume that the benefits start in the 5th year. B. Calculate the SIRR for the above project.
A. An NGO is considering building a school for children in a community with 200 children. Assume that currently, only 83 children attend school. Analysts have estimated that the new school will double school attendance to 166 children. Also, assume that the present social value of each child attending school is $2,000. If the project requires an initial investment of $50k plus an additional $15k per year after the first year until it is completed, and if it takes 4 years to complete, what is its SNPV at a PDR of 7%? Assume that the construction imposes a negative externally of $7k a year due to noise and pollution. Also assume that the benefits start in the 5th year.
B. Calculate the SIRR for the above project.
C. Explain, why a child attending school has social value
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