Benefits of three policy options

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Problem: As a policy analyst, you have measured the costs and benefits of three policy options as follows:

2019 2020 2021 2022 2023

Policy Option A

cost 1,000 1,150 1,200 1,350 1,100

Benefit 900 1,500 1,100 1,500 3,000

Policy Option B

cost 2,200 2,200 1,900 1,200 1,200

Benefit 250 300 2,000 3,700 10,000

Policy Option C

cost 1,000 1,100 1,200 1,250 1,100

Benefit 100 2,500 2,700 1,000 2,000

(1)  Calculate net present discounted values (PDV) of the three options. Explain what options are feasible.*The cost in 2019 considered as an immediate cost. For convenience sake, let us assume that the interest rate is 100% and that the scrap value of freed-up resources is zero when the project ended in 2023.

Reference no: EM132255461

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