State Representative James Smith Has Proposed a New State Supported

question 26

Essay

State representative James Smith has proposed a new state supported convention facility in the state's capitol. The convention facility would provide the state with $400,000 in net cash flow lease receipts) and would cost $3,000,000. The state Planning Department normally uses a 9% discount rate when evaluating capital projects. Should the state legislature adopt Smith's proposal if the project has a 15 year life? Why or why not?

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Definitions:

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A form of arbitration overseen by a court, often used to streamline legal disputes by using a neutral third party.

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