Suppose a Firm's CFO Thinks That an Externality Is Present

question 41

True/False

Suppose a firm's CFO thinks that an externality is present in a project, but that it cannot be quantified with any precision--estimates of its effect would really just be guesses. In this case, the externality should be ignored--i.e., not considered at all--because if it were considered it would make the analysis appear more precise than it really is.

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Definitions:

World Trade Organization

An international organization that regulates international trade.

Economies of Scale

Cost advantages achieved when increasing production leads to lower fixed costs per unit.

Restrictive Health

Policies or practices designed to restrict or control the availability of medical treatments, procedures, or resources, often for regulatory or budgetary reasons.

Export Subsidies

financial support from governments to domestic companies for the purpose of promoting goods for export, aimed at increasing competitive advantage on the global stage.