Which of the following factors influence the appropriate value for the social rate of discount used in NPV analysis of stock externalities?
A) Expected rate of economic growth
B) Extent of social risk aversion
C) The society's rate of time preference
D) all of the above

Question

Quizplus · Accepted Answer

All of the above factors influence the appropriate value for the social rate of discount used in NPV analysis of stock externalities. The expected rate of economic growth and the society's rate of time preference affect the opportunity cost of investing resources in the present versus the future, while the extent of social risk aversion affects the willingness to wait for benefits in the future. Therefore, all three factors must be considered when determining the appropriate social rate of discount.

Which of the Following Factors Influence the Appropriate Value for the Social