ECON-3056EL Lecture Notes - Lecture 4: Sustainable Yield, Hyperbolic Discounting, Net Present Value
28 Feb 2017
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Assig(cid:374)(cid:373)e(cid:374)t (cid:1006) (cid:894)worth (cid:1005)5%(cid:895: roi = 100 (0. 07 x 11) = . In 11 years i will have for a simple investment with 7% interest on principal per year: 100/(1. 07)^11 = 47. 51. If i look to earn in 11 years, my initial investment would be . 51 at an interest rate of 7% a year: npv = [400,000/(1. 05)^3] [100,000/(1. 05)] [200,000/(1. 05)] [50,000/(1. 05)^2] The expected profitability of the project now is ,469. 28: the carbon tax, is essentially what we are talking about in this case. The low end estimates are reasonable from a consumers standpoint but in the end they are low. We need to find a middle ground that will compensate for the damage caused by the reseal of co2 and also help combat the heavy usage of gasoline. If we impose a price on the released co2, it may apply pressure to the economy to think twice when producing vehicles and power sources.
