Question
A. Briefly evaluate the correctness of the following statement: Using a higher discount rate in cost-benefit analysis tends to favor policies and projects that would
A. Briefly evaluate the correctness of the following statement: Using a higher discount rate in cost-benefit analysis tends to favor policies and projects that would lead to higher environmental quality in the future.
B. True or False (Explain your answer) : If Group A benefits from an environmental policy more than Group B, then transferring some of Group A's net benefits to Group B will make the outcome more efficient.
C. Assume that you have a very thorough accounting of the costs and benefits of two mutually exclusive projects with different time horizons. You find that the annualized net benefits (ANB) of the longer project is higher than the ANB of the shorter project. Indicate whether the following statements are True, False, or Not Enough Information to determine (NEI). Explain your answer.
- 1. The longer project has the higher net present value (NPV)
- 2. It is efficient to choose the longer project
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