QUESTION 7 The federal government is planning to clean up the Great Pacific Garbage patch. It will cost $2bn in the first year and then $1bn in the following year. The benefits of the clean-up will be greater marine life, valued at $2bn for 3 years after the clean-up. If the discount rate is 20%, should the federal government do this O Yes, because $6bn is bigger than $2bn Yes, because the present value of benefits exceeds the present value of costs No, because the present value of benefits is lower than the present value of costs Yes, because clean-up of marine life is always important

QUESTION 7 The federal government is planning to clean up the Great Pacific Garbage patch. It will cost $2bn in the first year and then $1bn in the following year. The benefits of the clean-up will be greater marine life, valued at $2bn for 3 years after the clean-up. If the discount rate is 20%, should the federal government do this O Yes, because $6bn is bigger than $2bn Yes, because the present value of benefits exceeds the present value of costs No, because the present value of benefits is lower than the present value of costs Yes, because clean-up of marine life is always important

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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