ZuoTi.Pro
Question

Given that the tax revenue collected for a public project should not be counted in a CBA of a public project if the proj...

Given that the tax revenue collected for a public project should not be counted in a CBA of a public project if the project's directed costs and benefits are already counted, in what way might a tax still have an economic impact that should be accounted for in the analysis? Explain in detail.

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

Homework Answers

Answer #1

The direct costs and benefits include the costs and benefits which can be measured in terms of money. However there are externalities and implicit costs and benefits which are not measured in terms of money. For example if a pollution reducing plant is built then the individuals staying near the plant enjoy fresh air. However they are not paying anything for the benefit they receive from the clean air and therefore is not measured. But since this is a benefit so this should be included in the Cost Benefit Analysis (CBA)

0 0
Add a comment
Know the answer?
Add Answer to:
Given that the tax revenue collected for a public project should not be counted in a CBA of a public project if the proj...
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

  • Assume free markets in your analysis of public policy proposals a and b. Assume you are...

    Assume free markets in your analysis of public policy proposals a and b. Assume you are an elected official in the Michigan legislature, and you have to vote on a proposal to increase the minimum wage. Use free market economic theory (describe necessary concepts and assumptions and use examples, figures of hypothetical labor market situations where appropriate), and whatever you have learned that is relevant to explain to your constituents how you are going to vote and why. In your...

  • 12-8. NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D...

    12-8. NEW PROJECT ANALYSIS You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $170,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $60,000. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $50,000 per...

  • B.) Based on the risk-adjusted NPVs, which project should BPC choose? Project A or B? C.)...

    B.) Based on the risk-adjusted NPVs, which project should BPC choose? Project A or B? C.) If you knew that Project B's cash flows were negatively correlated with the firm's other cash flow, but Project A's cash flows were positively correlated, how might this affect the decision? Would it make Project B more or less appealing? D.) If Project B's cash flows were negatively correlated with gross domestic product (GDP), while A's cash flows were positively correlated, would that influence...

  • Excel Online Structured Activity: New project analysis You must evaluate the purchase of a proposed spectrometer...

    Excel Online Structured Activity: New project analysis You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $170,000, and it would cost another $34,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $42,500. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require an $13,000 increase in net operating working capital...

  • What is the operating cash flow (OCF) for year 3 of the health club project that Silver Sun Shipping should use in its N...

    What is the operating cash flow (OCF) for year 3 of the health club project that Silver Sun Shipping should use in its NPV analysis of the project? Silver Sun Shipping operates a(n) laser tag center. The firm is evaluating the health club project, which would involve opening a health club. During year 3, the health club project is expected to have relevant revenue of 722,400 dollars, relevant variable costs of 386,300 dollars, and relevant depreciation of 95,900 dollars. In...

  • 170118/mod resource/content//AC (a) You are given the following information in relation to Percussion Ltd: Sales £29,250,000...

    170118/mod resource/content//AC (a) You are given the following information in relation to Percussion Ltd: Sales £29,250,000 Gross profit margin 10% General expenses £675,000 Tax £450,000 400,000 Number of shares issued at start of the period Number of shares issued at full market price of £190 per share for cash, half way through the period 320,000 1 Required: (0) Calculate the price earnings ratio and the earnings per share for Percussion Ltd. (1) If a company has a high price earnings...

  • Comprehensive/Spreadsheet Problem 12-18 NEW PROJECT ANALYSIS You must analyze a potential new product-a caulking com- pound...

    Comprehensive/Spreadsheet Problem 12-18 NEW PROJECT ANALYSIS You must analyze a potential new product-a caulking com- pound that Cory Materials' R&D people developed for use in the residential construction industry Cory's marketing manager thinks the company can sell 115,000 tubes per year at a price of $3.25 each for 3 years, after which the product will be obsolete. The purchase price of the required equipment, including shipping and installation costs, is $175,000, and the equipment is eligible for 100% bonus depreciation...

  • Consider a project with annual expected income based on approximately $125 million in revenue and approximately...

    Consider a project with annual expected income based on approximately $125 million in revenue and approximately $77.5 million in total variable cost. You realize that both of these numbers are projected, and that your projections may be incorrect. Your boss wants you to conduct a sensitivity analysis to determine whether the project is a winner. You are entering an established market, and you know the market size will be 1,000,000 units. You are unsure of your exact market share, the...

  • You are a top executive in your corporation. After careful consideration, you were selected to work...

    You are a top executive in your corporation. After careful consideration, you were selected to work on a project to use MIS to change the way business is run. You will be responsible for researching the practices in your industry, identify the strengths and weaknesses of the industry, and make an innovative plan to use MIS to improve on current practices Your report MUST include the following side headings: • History and Background (provide detailed information about the industry, past...

  • Section III of this assignment asks you to explain how finding the answer to your question...

    Section III of this assignment asks you to explain how finding the answer to your question might impact others around you. For instance, who might be most invested in the answer? Using your Asking Questions Chart, complete a short draft of Section III of your Project 3 submission for instructor feedback. This should be a short paragraph of three to four sentences. You may write your submission directly into the “Write Submission” textbox below. This activity is provided as a...

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