Cost and Benefit Analysis of Anti-Pollution Programs
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The following table shows the total costs and total benefits in billions for four different antipollution programs of increasing scope. Which program should be undertaken? Why?
Program Total Total
Cost Benefit
A $3 $ 7
B 7 12
C 12 16
D 18 19
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Solution Summary
The following table shows the total costs and total benefits in billions for four different antipollution programs of increasing scope. Which program should be undertaken? Why?
Program Total Total
Cost Benefit
A $ 3 $ 7
B 7 12
C 12 16
D 18 19
Solution Preview
While the benefits of all four projects exceed their costs, some offer more return for the risk. If projects are mutually exclusive (i.e., choosing one will cause the others not to be selected) we should look for the project offering ...
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