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For each possible policy, sample returns while following it; Choose the policy with the largest expected discounted return; One problem with this is that the number of policies can be large, or even infinite. Another is that the variance of the returns may be large, which requires many samples to accurately estimate the discounted return of ...
An example would be a factory increasing its saleable product, but also increasing its CO 2 production, for the same input increase. The law of diminishing returns is a fundamental principle of both micro and macro economics and it plays a central role in production theory .
Internal rate of return ( IRR) is a method of calculating an investment 's rate of return. The term internal refers to the fact that the calculation excludes external factors, such as the risk-free rate, inflation, the cost of capital, or financial risk . The method may be applied either ex-post or ex-ante.
Return on investment ( ROI) or return on costs ( ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment ...
Interwar years: 1921–1933. In the 1920s, American policy was an active involvement in international affairs, while ignoring the League of Nations, setting up numerous diplomatic ventures, and using the enormous financial power of the United States to dictate major diplomatic questions in Europe.
Rate-of-return regulation (also cost-based regulation) is a system for setting the prices charged by government-regulated monopolies, such as public utilities. It attempts to set prices at efficient (non-monopolistic, competitive) levels [1] equal to the efficient costs of production, plus a government-permitted rate of return on capital.