You have been asked to evaluate whether a project to preserve an area of forest should go ahead or whether the land should be converted to agriculture. The net benefits of ecosystem goods and services have been valued over the next four years at R6000, R10 000, R14 000 and R22 000 respectively. The immediate cost of preserving the forest is R23 500. Assume that MWTP = 90 - 3Q and MC = 10 + 2Q. The discount rate is 7%.

You have been asked to evaluate whether a project to preserve an area of forest should go ahead or whether the land should be converted to agriculture. The net benefits of ecosystem goods and services have been valued over the next four years at R6000, R10 000, R14 000 and R22 000 respectively. The immediate cost of preserving the forest is R23 500. Assume that MWTP = 90 - 3Q and MC = 10 + 2Q. The discount rate is 7%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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