ZuoTi.Pro
Question

A firm based in and owned by investors in Northern province is considering a project in nearby Southern province that has discounted net benefits and costs, at market prices before tax, of $10,000 and $7,000 respectively. (Included in these costs are wages of $4,000.) If the project goes ahead, company tax with a present value of $2,000 will be paid to the government of Southern province. The project will also produce water pollution affecting downstream users in both Southern and Northern provinces, with costs (on a discounted basis) estimated at $4,000 and $700, respectively. The project will create employment benefits for the underemployed in Sunny province, with a present valued at $2,500. Assume that there are no other differences between market and efficiency prices and the referent group is the population of Southern province. (a) Calculate the net benefits of the project in terms of:

(i) Project cost-benefit analysis

(ii) Private cost-benefit analysis

(iii) efficiency cost-benefit analysis

(iv) Aggregate cost-benefit analysis

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Pgeu cost Benehit tnalysi costs 4 benefta SLI Nothen Southero nlet beneftts and cotx before tax Tores Poid t0 1000 7,000 2-,000) pollution C Repucher Ber tits 2SDo S0OPavate cost bencfht tnaysis Sts Notheun Southuao Net benefit 4 cost 10 000 TD00 Private cost oyment beneht Paivato, cost-benefit $1500 tsoo efh cienuy cost -bereht malays Net benetits costk 10000 To00 La cost t polluted ,gata) 4100 申yooo 1300 3000 u) Alar etate cast-benefit. Net beneht 4 costs op00 1000 に) PALV 230O 4000 b 810

0 0
Add a comment
Know the answer?
Add Answer to:
(i) Project cost-benefit analysis (ii) Private cost-benefit analysis (iii) efficiency cost-benefit analysis (iv) Aggregate cost-benefit analysis...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A cost-benefit analysis of an irrigation project shows that the ratio of the discounted present value...

    A cost-benefit analysis of an irrigation project shows that the ratio of the discounted present value of benefits to costs is less than one. This implies that: a. the net benefit of the project is positive. b. the net benefit of the project is negative efficiency can be attained by undertaking the project. d. the project will redistribute income to the poor. QUESTION 6 A lower discount rate favors more capital-intensive investments that yield net benefits further into the future....

  • Benefit-Cost Analysis Table Road Project Analysis Government XYZ is considering the addition of a tool road...

    Benefit-Cost Analysis Table Road Project Analysis Government XYZ is considering the addition of a tool road segment to the regional road system. The projected costs and benefits for it has been estimated and converted into monetary units. The resulting data is outlined in the Table below. Furthermore, the discount rate has been determined to be 7% based on the entity’s weighted average cost of capital (WACC). Based on a benefit-cost analysis, determine whether this “pilot project” will provide a net...

  • Problem 2: Cost-benefit Analysis. A project costs 10 this ycar, has a benefit of 5 this...

    Problem 2: Cost-benefit Analysis. A project costs 10 this ycar, has a benefit of 5 this ycar, and has a bencfit of 6 next ycar. (a) Assuming that the interest rate is r , what is the present value (sum of the dis- counted benefits minus costs) of the project? (b) For what value of interest rate r, the present value of the project will be exactly equal to zero?

  • [6 marks] Suppose that Australia has a 25% ad valorem import duty on T-shirts and Australian...

    [6 marks] Suppose that Australia has a 25% ad valorem import duty on T-shirts and Australian consumers purchase these imported T-shirts at a price of $10 from various fashion outlets. A proposed project would replace 200,000 T-shirts currently imported annually by domestically produced T-shirts. The company hires unemployed domestic labor having an opportunity cost of 20% of the market wage and pays them $600,000 in yearly wages. The project also causes pollution worth $70,000 per year in Australia. The all-inclusive...

  • Which of the following statements is TRUE of a cost-benefit analysis of a potential government project?...

    Which of the following statements is TRUE of a cost-benefit analysis of a potential government project? a. Neither asset value increases to the property owners nor income increases to the property owners should be counted. b. Future costs and benefits should be discounted to present values before being compared. C. The net increase in jobs in a community is a benefit d. Both asset value increases to the property owners and income increases to the property owners should be counted....

  • Question 28 (1 point) What is the greatest difficulty with cost-benefit analysis of a public project?...

    Question 28 (1 point) What is the greatest difficulty with cost-benefit analysis of a public project? determining whether government revenue is sufficient to cover the cost of the project O determining whom to award the project contract determining the cost of the project determining the value or benefit of the project Question 29 (1 point) Saved What effect does a tax levied on the buyers of a product have? O It shifts the supply curve upward (or to the left)....

  • Problem 09.010 Benefit/Cost Analysis of a Single Project The estimated annual cash flows for a proposed...

    Problem 09.010 Benefit/Cost Analysis of a Single Project The estimated annual cash flows for a proposed municipal government project are costs of $710,000 per year, benefits of $910,000 per year, and disbenefits of $160,000 per year. Calculate the conventional B/C ratio at an interest rate of 12% per year, and determine if it is economically justified. The B/C ratio is The project is economically (Click to select) A

  • Problem 09.010 Benefit/Cost Analysis of a Single Project The estimated annual cash flows for a proposed...

    Problem 09.010 Benefit/Cost Analysis of a Single Project The estimated annual cash flows for a proposed municipal government project are costs of $800,000 per year, benefits of $910,000 per year, and disbenefits of $230,000 per year. Calculate the conventional B/C ratio at an interest rate of 9% per year, and determine if It is economically justified. The B/C ratio is The project is economically not justified

  • 2. Preform a benefit/cost analysis on the following project: Expected costs: $5,000 today, $6,000 a year...

    2. Preform a benefit/cost analysis on the following project: Expected costs: $5,000 today, $6,000 a year from today, and $5,000 two years from today Expected revenue: $7,000 five years from today, $6,000 seven years from today, and $8,000 ten years from today. Assume a 5% discount rate Find: a. The Net Present Value (NPV) of the project b. The benefit/cost ratio c. Is the project worth undertaking?

  • Leck my work Problem 09.013 Benefit/Cost Analysis of a Single Project As part of the rehabilitation...

    Leck my work Problem 09.013 Benefit/Cost Analysis of a Single Project As part of the rehabilitation of the downtown area of a southern U.S. city, the Parks and Recreation Department expects to develop the space below several overpasses into basketball, handball, miniature golf, and tennis courts. The estimates are initial cost of $185,000; life of 20 years and, annual M&O costs of $16,000. The department expects 26,000 people per year to use the facilities an average of 2 hours each....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT