Question

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.

Answer 1