Economic Dimension Estimate 1. Annual cost of $5 million in bonds over $300,000 (years 1–14) 15 years at a 6% bond interest rate 2. Annual maintenance, upkeep, and program management 3. Annual parks development budget $5,300,000 (year 15) $75,000 + 10% per year increase $500,000 (years 5-10) 4. Annual loss in commercial development $2,000,000 (years 8–10) 5. State sales tax rebates not realized $275,000 + 5% per year (years 8 on) $100,000 + 12% per year (years 6 on) 6. Annual municipal income from park use and regional sports events 7. Savings in flood control projects $300,000 (years 3–10) $1,400,000 (years 11–15) $500,000 (years 10 and 15) 8. Property damage (personal and city) not incurred due to flooding Identify different viewpoints for an economic analysis of the proposal, and clas- sify the estimates accordingly.
Economic Dimension Estimate 1. Annual cost of $5 million in bonds over $300,000 (years 1–14) 15 years at a 6% bond interest rate 2. Annual maintenance, upkeep, and program management 3. Annual parks development budget $5,300,000 (year 15) $75,000 + 10% per year increase $500,000 (years 5-10) 4. Annual loss in commercial development $2,000,000 (years 8–10) 5. State sales tax rebates not realized $275,000 + 5% per year (years 8 on) $100,000 + 12% per year (years 6 on) 6. Annual municipal income from park use and regional sports events 7. Savings in flood control projects $300,000 (years 3–10) $1,400,000 (years 11–15) $500,000 (years 10 and 15) 8. Property damage (personal and city) not incurred due to flooding Identify different viewpoints for an economic analysis of the proposal, and clas- sify the estimates accordingly.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The citizen-based Capital Improvement Projects (CIP) Committee for the city of Dundee has recommended a $25 million bond issue for the purchase of greenbelt/floodplain land to preserve low-lying green areas and wildlife habitat. Developers oppose the proposal due to the reduction of available land for commercial development. The city
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