One Advantage About an Emissions Permit System Is That

question 194

Multiple Choice

One advantage about an emissions permit system is that

• A)it creates a "license to pollute," sure to be popular with environmentalists.
• B)it reduces uncertainty about the quantity of pollution that will be emitted.
• C)it is a direct control system and avoids the inefficiencies of a market.
• D)permits can be handed out on the basis of need to protect firms from high costs.

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Definitions:

Capitalized

Recorded as an asset rather than an expense, allowing the cost to be expensed incrementally through depreciation or amortization.

Implicit Interest Rate

The interest rate in a lease or loan that is not explicitly stated but can be calculated by comparing the present value of the lease payments or loan repayments to the original amount financed.

Present Value Factors

Multipliers used in calculating the present value of a future amount of money or cash flows, considering a specific interest rate over a period of time.

Capital Lease

An accounting treatment for leases where the lessee records the leased property as if it was purchased, showing both an asset and a liability on the balance sheet for the lease obligation.