1. Compare the Opportunity Cost of Buying a New Car with the Opportunity Cost of Going to College?

2. How would you relate one to the other or compare and analyze them separately, assuming that they are not mutually exclusive

1. When the social cost of producing a good is higher than the private cost, then

A) positive externalities exist.

B) there are no externalities.

C) negative externalities exist.

7. If pollution exist in a market,

A) the supply curve would be lower than optimum and the equilibrium quantity higher than optimum.

B) the supply curve would be higher than optimum and the equilibrium quantity lower than optimum.

C) the supply curve would be higher than optimum (efficient) and the equilibrium quantity higher than optimum.

9. Which of the following are examples of command-and-control regulation?

A) The U.S. government makes subsidies available to the manufacturing industries whose CO2 emissions exceed certain levels to install equipment to scrub the CO2 from their emissions.

B) The U.S. government determines solar panels are cleaner energy and subsidizes their use to reduce CO2 emissions from manufacturing industries.

C) The U.S. government requires firms to install antipollution equipment to improve air and water quality.

10. What are the benefits of clearly established property rights?

A) Responsible parties are identified and it helps increase negative externalities.

B) Business are incentivized to comply with regulations.

C) Responsible parties are identified and it helps reduce negative externalities.

A project firm is considering for implementation has these estimated cost and reveneus: an investment cost of $50,008, mantainance cost starts at $5,000 at the end of year(FOY) one and increase by $1,000 for the next four years, and then remains constant for the following five years: savings of $24,105 per year(EOY 1-10) and finally a resale value of $27,215 at EOY 10. If the project has a 10 year life and the firm's MARR is 10% per year, What is the present worth of the project?

A proposed cost-saving device has an installed cost of $695,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $105,000, the marginal tax rate is 25 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $80,000.

What level of pretax cost savings do we require for this project to be profitable? MACRS schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Explain the definitions and differences between the weighted average cost of capital and the marginal cost of capital.   What business decisions are impacted by the marginal cost of capital and why is the marginal cost of capital calculated for this purpose?

Pretax cost Savings:

A proposed cost-saving device has an installed cost of $655,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $65,000, the marginal tax rate is 22 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $56,000. What level of pretax cost savings do we require for this project to be profitable? MACRS schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)