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uestion . Consider the following 3 criteria for undertaking an investment project: (i) PV, (B) > K, r is the social rate of discount (ii)
uestion . Consider the following 3 criteria for undertaking an investment project: (i) PV, (B) > K, r is the social rate of discount (ii) PVp(B) > K , p is the private rate of discount or market interest rate iii) PV), (B) > K, where pi = _ wir + _ wir; and >wit ) wj = 1 n+ 1 n+1 and PV(B) is the net benefit of a stream of benefits Bo, ...., By and K is the initial outlay a.What real world feature makes (iii) a better criterion than (i) or (ii) ? b. If there is no consumption which criterion would you use ? c. What are the potential problems with all three criteria
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