Assume B is social benefits, C is social costs, r is the social discount rate, t is the time and T is…
NPV=Σ(Bt−Ct)/(1+r)^t. Reversing net benefits flips sign, inverting the fraction changes its economic units, and usingCt^t ignores discounting. Only discounted benefits minus…
Choose your answer
Assume B is social benefits, C is social costs, r is the social discount rate, t is the time and T is the life of the investment project. The Net Present Value (NPV) of a project is
Answer and explanation
Correct answer A
NPV=Σ(Bt−Ct)/(1+r)^t. Reversing net benefits flips sign, inverting the fraction changes its economic units, and usingCt^t ignores discounting. Only discounted benefits minus costs is correct.
Practice for these exams
-
UGC NET Economics