Suppose a Firm Wants to Build a New Factory That

question 20

Multiple Choice

Suppose a firm wants to build a new factory that would add pollution to an already polluted area. Under an offset program, the firm must:

• A) install scrubbers and other government-mandated equipment.
• B) purchase pollution permits from the government.
• C) reduce or eliminate an old pollution source in the area.
• D) pay a tax which depends on the amount of pollution created.

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Definitions:

Capital Lease

A lease agreement that has the characteristics of a purchase agreement, where the lessee assumes some risks and benefits of ownership.

Direct Lease

A rental agreement directly between the landlord and tenant, excluding any subleasing arrangements.

Tax Benefits

Financial advantages granted by governmental policies to reduce a taxpayer's burden, often to encourage certain business activities or investments.