Suppose the costs of an environmental pollution-control program are expected to be equal to $80 per year, and that benefits will be $50 per year for 50 years, then $150 per year thereafter. At a discount rate of 4 percent, what are the net benefits of this program? What would the net benefits be at a discount rate of 2 percent? Comment on the difference.
Suppose the costs of an environmental pollution-control program are expected to be equal to $80 per year, and that benefits will be $50 per year for 50 years, then $150 per year thereafter. At a discount rate of 4 percent, what are the net benefits of this program? What would the net benefits be at a discount rate of 2 percent? Comment on the difference.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- Suppose the costs of an environmental pollution-control program are expected to be equal to $80 per year, and that benefits will be $50 per year for 50 years, then $150 per year thereafter. At a discount rate of 4 percent, what are the net benefits of this program? What would the net benefits be at a discount rate of 2 percent? Comment on the difference.
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