In cost-benefit analysis, discounting refers to a. subsidizing goods with positive environmental externalities. b. reducing the...
In cost-benefit analysis, discounting refers to
a. subsidizing goods with positive environmental externalities.
b. reducing the weight of future costs or benefits.
c. calculating a lower-bound estimate of the costs of a project.
d. using replacement cost methods instead of stated preference methods.
Homework Answers
Solution: reducing the weight of future costs or benefits.
Explanation: In cost-benefit analysis, discounting means that the future benefits and costs must be discounted (i.e. reduced) to its present value; and thus will place them at par with benefits and costs incurred today
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