A city is weighing the cost and benefit of the new convention center. The center would be accounted for in an enterprise fund. It would cost $20 million and would be funded from the proceeds of 20-year revenue bonds. Officials estimate that the center would generate $3.5 million each year and rental and other feet and would cost $1.6 million (excluding interest) to operate.

1.) based on the limited amount of information, should the city district the convention center? Assume that the term of the bonds is indicative to the center is useful life and thats the cities cost of capital is 6%.

2.) suppose the city officials estimated that the center would generate an additional hundred $50,000 and general sales tax and tuner thousand dollars in hotel occupancy tax that are dedicated to the promotion of tourism. However, the sooner it would cost the city and an additional $250,000 to provide police, fire, and the other services in connection with the center events. Further, the city utility department accounted for and enterprise fun would have to extend utility lines to the center initial cost of $1.7 million and would have to incur an annual cost of $50,000 to maintain and repair these lines. None of these operating in utility cost would be charged to the convention center. Taking into account these costs and revenues, should that city construct the convention center?

3.) assuming that the city wear to construct the convention center, what would be the annual impact of revenue and expenses/expenditures ( expanding interest and other financing costs) of the following funds?

A. Convention center fund

B. General fund

C. Hotel occupancy tax fund

D. Utility fund