Answer:
a. the marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable.
Explanation:
Pollution can be defined as the physical degradation or contamination of the environment through an emission of harmful, poisonous and toxic chemical substances.
Offset trading refers to a type of trading system that is typically designed for the realization of more efficient pollution control.
This ultimately implies that, an offset trading is a strategic program that allows emerging business firms to pay existing business firms in order to significantly reduce their emissions or pollutants below a specific standard.
Free market in tradable pollution permits simply means giving manufacturing companies and individuals the legal right to pollution of the environment. For example, XYZ company is purchasing the permit of 500 units of carbon dioxide (CO2) pollution annually, this simply means it is permitted to pollute the environment by 500 units of CO2 annually.
Additionally, a free market in tradable pollution permits has some sort of benefits as companies can resell their unused permits or devise a cheaper means of reducing pollution. It also compensate companies that significantly reduces its pollution of the environment.
A pollution tax can be defined as a type of tax imposed on business firms that causes pollution and damages to the environment. It is also referred to as Pigovian tax which is a tax on goods with negative externality.
Hence, tradable permits when compared with pollution tax are likely to result in less inefficiency, when the marginal costs of damages are steep and the marginal costs of pollution reduction are relatively stable.
Answer and Explanation:
The computation of the MIRR is shown below:
But before that terminal cash flow required to calculate
<u>
Year Cash Flows FV Factor Formula Terminal Value
</u>
<u> (Cash Flow × FV Factor) </u>
0 ($1,000)
1 $450 1.21 (1 +10%)^(2) $545
2 $450 1.1 (1 + 10%)^(1) $495
3 $450 1 1 $450
Terminal Cash Flow $1,490
now the MIRR is
![MIRR = \sqrt[n]{\frac{terminal\ cash\ flow}{initial\ investment} } - 1\\\\= \sqrt[3]{\frac{\$1,490}{\$1,000} } - 1](https://tex.z-dn.net/?f=MIRR%20%3D%20%5Csqrt%5Bn%5D%7B%5Cfrac%7Bterminal%5C%20cash%5C%20flow%7D%7Binitial%5C%20investment%7D%20%7D%20-%201%5C%5C%5C%5C%3D%20%5Csqrt%5B3%5D%7B%5Cfrac%7B%5C%241%2C490%7D%7B%5C%241%2C000%7D%20%7D%20-%201)
= 14.22%
As it can be seen that the MIRR is more than the WACC so the project should be accepted.
Answer:
c) $210
Explanation:
Revenue is recognized in the year in which it is intended to finance an activity.
The Cash collected During 2014 relating to licences will be used to finance the salaries for the inspectors during 2014 and cash collected during 2014 = $210 (30+180)
<span>The answer is a. complementary </span>
