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Congress is deciding to undertake action to alleviate the threat of global warming; By incurring a cost of 500 billion dollars today, we can reap
Congress is deciding to undertake action to alleviate the threat of global warming; By incurring a cost of 500 billion dollars today, we can reap the benefit of reduced global warming forever; the benefits of this are estimated to be 500 million per year.
(a) What is the internal rate of return on this project?
(b) If the social discount rate is 5%, should it be undertaken?
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