Cost Benefit Analysis And Discounting Flashcards
1
Q
Cost benefit analysis
A
Tool for comparing desirable effects and undesirable effects of a public sector over a time period
2
Q
If sum of benefits > sum of costs
TB>TC
A
Project option is justified on efficiency grounds and options with highest NB is most efficient
3
Q
What should we use to select most effective option
A
NPV
4
Q
Horizontal equity
A
Treats like(income groups) people equally
5
Q
Vertical equity
A
Treatment of people with different incomes
6
Q
Proportional project
A
NB as % of income same for all income groups
7
Q
Progressive project
A
% NB decreases as income increases
8
Q
Regressive project
A
% NB increases as income increases
