A financial investigation by a private firm finds that a new railway line would not be profitable.
A cost-benefit analysis finds that the line is worth constructing.
What could explain this difference?
1 )
There are external costs not included in the financial investigation.
There are external benefits not included in the financial investigation.
3 )
A higher rate of interest is used in cost-benefit analysis.
4 )
Cost-benefit analysis uses a higher estimate for wage costs.
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