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.