Public Policy Analysis

Based on the Criterion of Efficiency, the City of Indus-Valley has to select any one project as the best policy option between the following projects A, B, and C. Please suggest which project would be the best policy option for the City of Indus-Valley. The data for projects a, b, and c is provided in the attached excel sheet. Please provide the complete step-wise calculations either in the excel sheet or the word document for this question (worth 15 points).

Project A. A bridge takes five years to build, then yields a $50 Million (M) benefit per year for the next 10 years. The benefits are received at the end of each year. Assume that the costs are spread out evenly over the five years (i.e. year 1 to year 5) and are paid at the end of each year.

Project B. Temporary classrooms for schools yielding $50M benefit per year for five years. The benefits are received at the end of each year. Assume that all costs are paid at the end of year 1.

 Project C. Tax breaks per year to a foreign auto manufacturer for a new auto plant yielding a $ 20 M benefit per year from the tenth year for the next 5 years. The benefits are received at the end of each year. Assume that all costs are paid at the end of year 1.