When Finding the Weighted Discount Rate One Should

question 7

Multiple Choice

When finding the weighted discount rate one should

• A)average the highest and lowest estimated social discount rate
• B)find the annualized present value of a project using the social discount rate
• C)subtract the social discount rate from the return on capital
• D)find the fraction of a projects costs that comes from displaces consumption and displaced investment

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Definitions:

Multiple Owners

A business structure where two or more individuals share ownership and responsibilities of managing the business.

Limited Liability Company

A business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities.

Tax Treatment

The manner in which an item or transaction is taxed by authorities, affecting how it is reported and what deductions or credits may apply.

Limited Liability

A legal structure for businesses where owners' personal assets are protected from the company's debts and liabilities.