For this assignment, you will conduct a Monte Carlo Analysis of a CBA with complex uncertainty.  You are analyzing a decision to build a new public infrastructure development in Bloomington.  Costs and benefits are summarized below:

Costs

Concrete (expected 1000 tons, but standard deviation of 100 tons) at an expected price of $30 per ton (but standard deviation of price is $5)

Workers (expected 20000 person-hours, but standard deviation of 3000 person-hours) at a wage of $15 per person-hour.

Chance of worker injury on the job (Expected injuries = 100, but standard deviation is 25).  Each injury will cost the city $1,000.

Benefits

Improved travel time for citizens (Expected value is $500,000, standard deviation of $100,000).

 

Write an R Script that will analyze the uncertainty of the net benefits of this project.  Your script should include 10,000 repetitions.  What percentage of the time does the project pass a cost/benefit test?

Attach your R-Script (text or .R file) and excel output of your Net Benefits showing the calculation of percent of times that it passes the CBA.