TAILIEUCHUNG - Lecture note Public finance (10th Edition) - Chapter 8: Cost-benefit analysis

In this chapter, the following content will be discussed: Cost-Benefit analysis is used to evaluate potential public sector projects; present value of future expected costs and benefits must be calculated in order to allow correct comparisons; although the IRR and B-C Ratio are used to evaluate projects, the NPV criterion has fewer biases and problems; | COST-BENEFIT ANALYSIS Chapter 8 Projecting Present Dollars into the Future R=$ T=years r=interest rate How much will $1000 earn in 2 years at an interest rate of 10%? R0 = $1000 R1 = $1000*(1+.01) = $1010 R2 = $1010*(1+.01) = $ R2 = $1000*(1+.01)2 = $ RT = R0*(1+r)T 8- one click per line Projecting Future Dollars into the Present How much will $1000 earned in 2 years at an interest rate of 10% be worth today? Since RT = R0*(1+r)T R0 = RT/(1+r)T Present Value discount rate discount factor Low r – more future-oriented and benefits projects in which returns are concentrated further into the future High r – more present-oriented and benefits projects in which returns are concentrated closer into the future 8- 5 lines visible 1st click – 6th line 7th click – “Present Value” 8th click – “discount rate” 9th click ‘ discount rate arrow disappears, bracket appears, “discount factor” Present Value of a Stream of Money 8- Inflation How to incorporate .

• Tài chính doanh nghiệp
• Public finance
• Lecture Public finance
• Public Economics
• Cost benefit analysis
• Private sector project evaluation
• Government projects
• Federal system
• Fiscal federalism
• Public expenditure
• Public good
• Public spending
• Public education
• Tiebout model
• Public sector economics
• Federal government
• The corporation tax
• Tax equity
• Public goods
• Public services
• Inflation taxation
• Education Increase Earnings
• Public education improves quality
• Interpreting deficit
• Burden of the debt
• Neoclassical model
• Political economy
• Median voter model
• Special interest
• Public economy
• Legal framework
• Local governments
• Market mechanism
• Coase Theorem
• Public Responses
• Public employees
• Representative democracy
• Tools of positive analysis
• Positive analysis
• Empirical work
• Normative analysis
• Tools of normative analysis
• Welfare economics
• Nature of externalities
• Graphical analysis
• Internal rate
• Benefit cost ratio
• Health care market
• Social insurance
• Risk pooling
• Moral hazard
• Market for health care
• Private health insurance
• Health insurance
• Social security
• Benefit structure
• Savings behavior
• Income redistribution
• Distributional dataissues
• Income inequality
• Expenditure programs
• Expenditure programs for the poor
• Work incentives
• Income distribution
• Tax incidence
• Partial equilibrium models
• Tax on consumption bundle
• Excess burden
• Demand curves
• Equitable taxation
• Optimal commodity taxation
• The ramsey rule
• Personal income tax
• Haig simons income
• Capital gains
• Personal taxation
• Human capital accumulation
• Labor supply