Is it worth investing in a project that costs up to 600 million dollars across 11 years but is expected to bring tens of billions of dollars in benefit between 60 and 120 years from now when there is a 0 percent discount rate? Why or why not? What about a discount rate greater than 0, should the policy be implemented then?
Is it worth investing in a project that costs up to 600 million dollars across 11 years but is expected to bring tens of billions of dollars in benefit between 60 and 120 years from now when there is a 0 percent discount rate? Why or why not? What about a discount rate greater than 0, should the policy be implemented then?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5MC
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Is it worth investing in a project that costs up to 600 million dollars across 11 years but is expected to bring tens of billions of dollars in benefit between 60 and 120 years from now when there is a 0 percent discount rate? Why or why not? What about a discount rate greater than 0, should the policy be implemented then?
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