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Suppose you must choose between two policies (A, B) that offer the following series of net benefits over time. All net benefits are in real
Suppose you must choose between two policies (A, B) that offer the following series of net benefits over time. All net benefits are in real values (i.e. there is no inflation). (a) If the discount rate ( \\( r \\) ) is \5, which plan has the highest present value? (b) if the discount rate (r) is \20, which plan has the highest present value? (c) Suppose there is a \50 chance that Policy A yields net benefits that are smaller than previously calculated. Specifically there is a \50 chance the \"high\" benefits are experienced and \50 chance of \"low\" benefits. Calculate the expected net benefit of Policy A under a \5 discount rate
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