Find the level of required to make the program a success

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A training program costs $100 per participant in year zero and nothing thereafter. It generates benefits of B per year beginning in year one. These benefits decline by 0.2B each year, so that in the sixth year they are zero. All wages and prices rise by 5A%each year, and the nominal discount rate is 7%. (Or assume and use a real discount rate of 2%.] Find the level of B required to make the program a success. Within your $ value of B, discuss the possible quantity impact implied and the likely shadow price.

Reference no: EM131546035

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