Question

QUESTION ONE. A government agency is in the process of revising its policies to make it...

QUESTION ONE.

A government agency is in the process of revising its policies to make it more effective and efficient. The Agency has so far come up three policy options they wish to implement, name:

  1. Maintaining the status quo;
  2. Change the legislation; and
  3. Borrow from the Commercial banks

The information on each of the proposed options is presented in the table below.

Options

Total Costs

Total Benefits

CBA= B - C

Option 1: Do nothing/Status Quo

Business

288,033,830

409,743,264

Households/Farmers

97,706,178

      993,551,254

Public Body or Regulatory Agency

1,527,269,150

932,918,555

Total

Option 2: Legislation Amendment

Business

288,033,830

409,743,264

Households/Farmers

97,706,178

      993,551,254

Public Body or Regulatory Agency

594,350,595

932,918,555

Total

Option 3: Commercial Borrowing

Business

288,033,830

746,214,575

458,180,745

Households/Farmers

97,706,178

      932,918,555

Public Body or Regulatory Agency

1,985,449,895

0

Total

REQUIRED

  1. Copy the information presented into excel and calculate the total costs, total benefits and the net benefits for each of the coloured/highlighted cells.
  2. You are expected to show the formulae in the excel sheet for your calculation.
  3. Which option should the government select to implement.

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