A Negative Externality Such as Pollution Can Be Corrected by

question 54

Multiple Choice

A negative externality such as pollution can be corrected by

• A) a subsidy to producers.
• B) a tax on producers.
• C) a subsidy to consumers.
• D) a stimulus to production.

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Definitions:

Capital Budgeting

The process in which a business evaluates and plans for significant investments or expenditures.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project, considering the time value of money.

Operating Cash Inflows

Cash received by a company from its operational activities, such as sales revenue minus the operating expenses.

Working Capital Investment

Funds invested in the short-term assets of a company, such as inventory and receivables, to support its day-to-day operations.