sample final questions

# sample final questions - • Assume an interest rate of...

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SAMPLE QUESTIONS Short Answers: What are the main differences between a social cost benefit analysis and a financial analysis? Explain three different reasons for public sector involvement. Explain why subsidies are not included in (social) Cost-Benefit Analysis Explain two advantages of using the NPV as compared to the internal rate of return for project appraisal? Explain the hedonic pricing method Consider a cost benefit analysis on climate change policies. Provide examples of costs and benefits of greenhouse gas emission reduction policies (2 examples of costs and two examples of benefits) What is a public good? Explain YLG, HYLG and DALY. What are the differences between a variable by variable sensitivity analysis and a scenario- approach sensitivity analysis?

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ANALYTICAL PROBLEMS 1. James Peter won a lottery and is offered two choices: \$700,000 today \$100,000 today, \$200,000 a year from today, and \$500,000 three years from today.
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Unformatted text preview: • Assume an interest rate of 8% (both for borrowing and saving) 2. What is better? Use the Future Value Criterion. 2. A project is expected to yield the following cash flows: Year 0 1 2 3 Cost \$100 \$100 \$150 Benefit \$200 \$250 Estimate the B/C ratio, NPV, IRR, discounted payback, and WMR. The discount rate is 8%. Is the project feasible? 3. Consider that the Provincial Government has to decide between building a new railway or a new highway. The following benefits are important: 1. Environmental Impacts (GHGs) 2. Travel Time The Government determined the following weights: For 1: 30%; For 2: 70% Estimate the weighted CE ratio using the data below: Category Highway Railway Environmental Impacts (tonne of GHGs reduced per capita) 2 5 Time (travel time, in hours, reduced per trip) 3 2 Costs (millions) 500 800...
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## This note was uploaded on 05/27/2010 for the course ECON ECON 3509 taught by Professor Pablo during the Winter '09 term at Carleton CA.

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sample final questions - • Assume an interest rate of...

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