Answer the following statement(s) true (T) or false (F)
1. If the nominal value of a benefit in 2011 is $1,500, its real value in 2012, assuming a 3 percent inflation rate, is $1,545.
2. If the real value of an environmental cost in 2011 is $2,500, its nominal value in 2010, assuming a 2 percent inflation rate, must have been $2,550.
3. The present value of benefits (PVB) is equal to?(bt/[1+rs]t), with bt= Bt/(1 + p)t.
4. For a given policy option, if the ratio of the present value of benefits (PVB) to the present value of costs (PVC) is greater than zero, that policy option is considered to be feasible.
5. For a given policy option, if (PVB – PVC) is greater than 1, that policy option is considered to be feasible.
1. False
2. True
3. True
4. False
5. False
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