Order the answer to: (a) An activity to improve the well-being of some impoverished

Order the answer to: (a) An activity to improve…

Question	(a) An activity to improve the well-being of some impoverished people will provide benefits of $1 million right now, but it will obliterate the earth in 200 years. The world’s value in 200 years is projected at $1012. There are no costs or benefits between these two dates. (a) Is it worth avoiding the world’s destruction in 200 years at a 10 percent discount rate? (b) Is it worth avoiding the world’s destruction in 200 years at a 6 percent discount rate? (c) If 10 percent is the interest rate in the private sector, what are some of the arguments for using a 10 percent discount rate? (d) What are some of the arguments for a lower discount rate? (e) Do you think discounting and benefit-cost analysis are appropriate ways to handle this problem? Why or why not?
Subject	business-economics

Question

(a) An activity to improve the well-being of some impoverished people will provide benefits of $1 million right now, but it will obliterate the earth in 200 years. The world’s value in 200 years is projected at $1012. There are no costs or benefits between these two dates.
(a) Is it worth avoiding the world’s destruction in 200 years at a 10 percent discount rate?
(b) Is it worth avoiding the world’s destruction in 200 years at a 6 percent discount rate?
(c) If 10 percent is the interest rate in the private sector, what are some of the arguments for using a 10 percent discount rate?
(d) What are some of the arguments for a lower discount rate?
(e) Do you think discounting and benefit-cost analysis are appropriate ways to handle this problem? Why or why not?

Subject

business-economics

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