The amount which the government has to borrow each year to finance public spending is called the
Public Sector Borrowing Requirement (PSBR).
Expenditure on public hospitals will increase the PSBR if the expenditure is funded from increasing
the government's borrowings, but will have a neutral effect on the PSBR if it is funded instead from
increased taxation. This is because the PSBR reflects the gap between the government's income
(mainly taxation) and it’s spending.
Expenditure on a major hospital refurbishment is likely to be incurred over a period of more than one
year, while the benefit of the refurbishment should arise over many more years into the future.
However, the effect on the government's accounts will arise when the expenditure is incurred because
of the cash accounting methods employed by the government, which does not currently encompass
the matching concept of the private sector accounting framework. The investment could be appraised
using a cost-benefit model which evaluates the social costs and the social benefits of an investment
project over its anticipated life.
Kavungya answered the question on April 14, 2021 at 19:01
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Required
(a)...(Solved)
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(a) To minimize its borrowing requirements; and
(b) To reduce the taxation of incomes.
Required
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Other information
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Date posted: April 14, 2021. Answers (1)
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variation.
b. Compute the correlation coefficient between
i. A and B
ii. A and C
iii. B and C
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Date posted: April 13, 2021. Answers (1)
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a. On the basis of these expectations, which securities are overvalued? Which are undervalued?
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Assume also that required rate of return on the market is 15% and stock i has CAPM beta of 1.1
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a. CAPM
b. APT
Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)