Suppose analysts are arguing about Head Start. The male analyst argues that the money spent on Head Start per person is worth it because current spending on it is less than current spending on the expected reduction in jail costs. The female analyst argues that the money was spent long ago and saved today and it would necessarily be worth it.

Question

Quizplus · Accepted Answer

The female analyst is advocating for present value analysis, as she is considering the money spent in the past and its worth in today's value. The male analyst is not effectively employing present value analysis since he is only comparing current spending on Head Start to expected reduction in jail costs, without considering the time value of money.

Suppose Analysts Are Arguing About Head Start