A foreign firm is considering a project which has present values of benefits and costs, at market

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A foreign firm is considering a project which has present values of benefits and costs, at market prices, of $100 and $60 respectively. If the project goes ahead, tax of $20 will be paid to the host country, and pollution costing the host country $10 will occur.

Assuming that the owners of the foreign firm are not part of the Referent Group, state what are the net present values generated by the following:

i the Market Analysis;

ii the Private Analysis;

iii the Efficiency Analysis;

iv the Referent Group Analysis.

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Cost Benefit Analysis

ISBN: 9781032320755

3rd Edition

Authors: Harry F. Campbell, Richard P.C. Brown

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