Knowledge test results

Question 1
When describing interest rates, investors often think about the next best thing that they could have done with their money. This concept is known as: A. Opportunity cost B. Discount rate C. Default risk You answered: Opportunity cost Explanation: Opportunity cost is the return forgone by not choosing the next best alternative, from an investors point of view the next best thing you could have done with your money. The discount rate makes us able to compare money between two different time periods, so isn't the answer. Default risk is also a different concept.

Question 2
A portfolio achieves the following quarterly returns: 3%, 5%, 6% and -8% If the value of the fund at the start was $10,000,000, what was the value at the end of the year? A. $10,349,376 B. $10,546,788 C. $10,983,736 You answered: $10,983,736 The correct answer is: $10,546,788 Explanation: $10,000,000 x 1.03 x 1.05 x 1.06 x 0.92 = $10,546,788 Note we are increasing the initial portfolio value by the quarterly returns: ($10,000,000 x (1+r) x (1+r) x (1+r) x (1+r) = final portfolio value)

Question 3
A fund is worth $10.0 million at the end of its first year. If the rate of return was 8%, what was the value of the fund at the start of the year? A. $9.26 million B. $9.72 million C. $9.88 million You answered: $9.26 million

Question 4
A customer has been offered two bank accounts, one that pays 8.2% compounded annually and another that pays 8% compounded quarterly. The customer should choose which bank account, and by how much is it better? A. The annually compounded account by 0.2% B. The quarterly compounded account by 0.04% C. The annually compounded account by 0.04% You answered: The quarterly compounded account by 0.04% Explanation: The annual return on the first account is 8.2% The annual return on the quarterly compounded account is = (1 + r/m)^n -1 =(1 + 0.08/4)^4 -1 = 0.0824. So this account provides 0.04 more than the annually compounded one.

Question 5
Susan is evaluating the profitability for the last quarter of ZNZ Company. Which of the following would help her most? A. Income Statement B. Cash Flow Statement C. Statement of owner's equity You answered: Income Statement Explanation: The income statement shows a company's profitability for a given time period. It shows the company's revenues minus its expenses = net income or net profit. The Cash Flow Statement and Statement of Owner's Equity give a lot of useful information, but not necessarily about profitability.

Question 6
The management of GC Corp. does not intend to liquidate the entity or cease trading. The management will prepare the financial statements on what basis? A. Consistency B. Accrual basis C. Going concern You answered: Accrual basis

The correct answer is: Going concern Explanation: Financial statements are prepared on a going concern basis unless management either intends to liquidate the entity or to cease trading. If not presented on a going concern basis, the company must disclose this fact and provide an explanation. Consistency and accrual basis are two other important accounting principles, but do not match the description in the question.

Question 7
Under the accrual basis of accounting, which of the following statements is false? A. Reported income provides a measure of the firm's current operating performance B. Revenue is recognized when cash is received, and expenses are recognized when payment is made C. Revenues and expenses may be allocated to time periods other than those in which the cash is received or paid You answered: Revenues and expenses may be allocated to time periods other than those in which the cash is received or paid The correct answer is: Revenue is recognized when cash is received, and expenses are recognized when payment is made Explanation: B is false. Accrual accounting provides a measure of a firm's operating performance and both revenues and expenses can be allocated to periods other than those that cash is received or paid out. Revenues and associated expenses are recognized when earned instead of only when cash is received or paid.

Question 8
An item that gives a company future economic benefits because it is owned or controlled by the company as a result of a previous transaction is best described as a(n) A. asset B. equity C. liability You answered: asset Explanation: This is the accounting definition of an asset. A liability is described as obligations of an entity resulting from previous transactions that are expected to result in an outflow of economic benefit in the future. Equity is defined as the residual interest in a company after deducting all the liabilities from the assets

Question 9
Sovereign risk includes which of the following? A. exchange rate risk B. central bank interest rate changes C. a country's willingness to meet its obligations You answered: central bank interest rate changes The correct answer is: a country's willingness to meet its obligations Explanation: Sovereign risk includes both a country's ability and its willingness to pay. Under willingness to pay political considerations may come into the equation.

Question 10
If a US investor with existing domestic investments purchases a highly volatile foreign asset: A. He will increase his risk B. His portfolio will become more volatile C. He may decrease his total portfolio risk You answered: He will increase his risk The correct answer is: He may decrease his total portfolio risk Explanation: Foreign investments generally show correlations of less than 1 with US investments so diversification may reduce risk.

Aptitude test results

Question 1
How much time do you spend at work, including commute in an average week? A. Less than 50 B. 50 and above You answered: 50 and above Explanation: Having time to study is one of the most critical factors in CFA exam success. You need to be prepared to work intensively during your study period.

Question 2

How many weeks since you last read the Wall Street Journal, The Economist, or the Financial Times? A. Less than two B. More than two You answered: More than two The correct answer is: Less than two Explanation: A natural interest in finance and events in the financial markets will greatly assist you in working through the material.

Question 3
Could you explain to a lay person what the difference between a bond and an equity is? A. Yes B. No You answered: Yes Explanation: Being able to break down key concepts into smaller, easier chunks is a key indicator of retention and understanding potential.

Question 4
In previous study have you preferred examination or essay based assessment A. Exam B. Essay You answered: Exam Explanation: The CFA exam process is a very direct measure of your syllabus understanding and the delay between sittings makes retakes very time consuming. You must be comfortable with examinations and the practical aspects of these to perform well in the CFA.

Question 5
Do you prefer self-study or group-study? A. Group-study B. Self-study You answered: Group-study The correct answer is: Self-study Explanation: Although both methods can be successful, the volume of material requiring study for the CFA is such that by necessity you will be working on your own most of the time. Self-discipline is vital.

Question 6
Have you discussed your potential CFA study with a training provider, friends, colleagues or peers who have already studied for the qualification? A. Yes B. No You answered: Yes Explanation: You are considering undertaking a large commitment. Understanding this commitment in advance of engagement is important to cementing your confidence.

Question 7
Do you expect or need to pass all three levels first time? A. Yes B. No You answered: Yes The correct answer is: No Explanation: The CFA exams are tough, and even with the highest tuition standards the majority of individuals take at least two attempts on at least one of the levels. This is part of the process and you should enter with realistic expectations.

Question 8
Would your friends describe you as someone who is comfortable asking for help? A. Yes B. No

You answered: Yes Explanation: However you choose to study for the qualification, ensuring you take advantage of the support framework around you is very important.

Question 9
If applicable, have you discussed your potential CFA study with your employer? A. Yes, or not applicable B. No You answered: Yes, or not applicable Explanation: You are likely to require both tangible and intangible support from your employer in the form of study leave and understanding. Securing this will make the journey a lot easier.

Question 10
If applicable, have you discussed your potential CFA study with your partner or family? A. Yes, or not applicable B. No You answered: Yes, or not applicable Explanation: Undertaking the qualification will impact on all areas of your life - it's important to lay out exactly what form this impact will take on day one.

Redneck Girl

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Depression, Suicide, & SelfInjury Quotes

These quotes are good. But I would like you to know that I my self am not a cutter, but my friend is. So a lot of these quotes have very personal meaning to me. I dedicate this page to her... Don't hold strong opinions about things you don't understand. My time has come, and so I'm gone. To a better place, far beyond. I love you all as you can see. But it's better now, because I'm free. Sometimes you need to run away just to see who will follow you. It's hard to answer the question "what's wrong" when nothings right. I'm tired of trying, sick of crying, I know I've been smiling, but inside I'm dying. Maybe one day it will be ok again. That's all I want. I don't care what it takes. I just want to be ok again. When I was younger crying always seemed to be the answer. Now that I'm older crying seems to be the only option. I guess there comes a point where you just have to stop trying because it hurts to much to hold on anymore. You say I'm always happy, and that I'm good at what I do, but what you'll never realize is, I'm a damn good

School Quotes Family Quotes People Quotes Depression, Suicide, & Self-Injury Quotes I've Learned... Quotes

actress too. Just because I'm smiling doesn't mean I'm happy. Tired of living and scared of dying. I don't necessarily want to be happy; I just want to stop feeling miserable. Don't fall into the trap of pretending everything's fine when you know it isn't. The hardest years in life are those between ten and seventy. I'm just learning how to smile, and that's not easy to do. Sometimes it hurts more to smile in front of everyone, then to cry all alone. I want to be remembered as the girl who always smiled the one who could brighten up your day, even if she couldn't brighten her own. Just when I thought my life was coming together, I realized it was just starting to fall apart. Stop the world I wanna get off. I bleed for you that's why I cut those simple scars are just deep thoughts. You bleed just to know your alive. Death is God's way of saying you're fired. Suicide is humans way of saying you can't fire me, I quit. I don't know what I want in life. I don't know what I want right now. All I know is that I'm hurting so much inside that it's eating me, and one day, there won't be any of me left. Everything that ever caused a tear to trickle down my cheek, I run away and hide from it. But now, everything is unwinding and finding its way back towards me. And I don't know what to do. I just know that pain I felt so long ago, it's hurting ten time more. It's the loneliest feeling in the world - to find yourself standing up when everyone else is sitting down. To have everybody look at you and say "what's the matter with her?" I know what it feels like. Walking down an empty street, listening to the sound of your

own footsteps. Shutters closed, blinds drawn, doors locked against you. And you aren't sure whether you're walking toward something, or if you're just walking away. You start life with a clean slate. Then you begin to make your mark. You face decisions, make choices. You keep moving forward. But sooner or later there comes a time where you look back over where you have been and wonder who you really are. I don't know if I'm getting better or just used to the pain. I know it seems like I'm this strong person who can get though anything, but inside I'm fragile. I've had so many things thrown at me, and each one has only made a crack. What I'm afraid of is shattering. Maybe I am crazy but laughing makes the pain pass by. I love sleep. My life has this tendency to fall apart when I'm awake. I know what its like to want to die; how it hurts to smile; how you try to fit in but you can't; how you hurt yourself on the outside; to try to kill the thing that's in the inside. Even the people who never frown eventually breakdown. How can you understand me when I can't understand myself? I hate what I have become to escape what I hated being. It's like I realized that way down inside, I've always been lonely for something. But I don't know what for. It's like everybody in the world want's something. Only they never really know exactly what it is - they just keep finding out what it's not. You know how, when you turn off the TV or you come out of some concert, and everything just feels empty? Like you thought that would be what you wanted, and then it wasn't? You look at me and think, 'she's so happy' but there's so much behind this little smile that you will never know. Do you ever have those times you cry and you don't

know why? People are always telling me to smile, like smiling is going to just take away all the hurt and pain. Well I've tried that I've tried hiding my sorrows and covering the sadness in smiles and what I've learned is that when it hurts this much inside your heart always has a way of showing it no matter how many masks you wear. Let no one think I gave in. The pain is there to remind me that I'm still alive. It seems to me that the harder I try the harder I fall. Refuse to feel anything at all, refuse to slip, refuse to fall, can't be weak, can't stand still, watch your back because no one else will. There's no excuse for the need to take your own life away, everyone passes through some rough obstacles if life, just face them as they come along, there's always a way to overcome those obstacles, and learn from your experiences. If you can't solve it, it isn't a problem - it's reality. And sometimes reality is the hardest thing to understand and the thing that takes the longest to realize. But once it hits you in the face you'll never forget it. It will always be there in your memories and sometimes that is the best way to look at it. It's funny the way you can get use to the tears and the pain. What do you do when you become too scared, too scared to live, too scared to die, too scared to love, too scared to even care? You can't just hug me and say it's okay because right n... it doesn't feel that w... Sometimes the littlest thing in life changes something forever and there will be times when you wish you can go back to how things used to be but you just can't because things have changed so much. I just wish I could roll back the clocks to when things were the same... then we were all just a bunch of crazy teenagers looking for a wild time. But now, thing aren't the same. Each of us have gone our different ways. We change, people change, things just change, and we aren't those crazy teenagers looking for a wild time anymore. We're teenagers looking for

a person to love and a person to hug when we're in need. Sometimes I think that if I wasn't so good at pretending to be, I'd be better at actually being happy. Her sadness did not have that. It dripped slowly into her life without her noticing it, at least, not noticing it until it consumed her fully and smothered her with darkness. I quit, I give up, nothing's good enough for anybody else, it see... when Im all alone it's best way to be. When I'm by myself nobody else can say good-bye. Everything is temporary anyway. Everybody's searching for a hero. People need someone to look up to. I never found anyone who fulfilled my need... a lonely place to be, and so I learned to depend on me. Pain is your friend, it tells you when you're seriously injured, it keeps you awake and angry but the best thing about it is it lets you know that you're alive. I have a tendency to hurt myself physically, when I'm hurting inside. When your sure you've had enough of this life... don't let yourself go... because everybody cries... everybody hurts sometimes... sometimes everything is wrong. Some of us are just trying to get through the day without falling apart. Every night before I go to sleep I lie on my bed and stare up at my blank walls. I try to imagine the future, but right now it's as blank as those walls. All I can see is a past that I barely recognize any more. I don't want the world to see me, because I don't think that they'd understand. Look at me. You may think you see who I really am, but you'll never know me. There's a smile on my face but I don't know why it's there... I put it on to satisfy all the people that don't even care. I'm often silent when I am screaming inside. The deepest people are the ones who've been hurt the

most. Someone once asked me, 'Why do you always insist on taking the hard road?' I replied, 'Why do you assume I see two roads?' Wear a mask that grins and lies, it hides our cheeks and shades our eyes. The debt we pay to human guile, with torn and broken hearts, we smile. Sometimes I feel like nobody has held me down and forced me to cry or made me hug them, or seen to the inside of me. I just say 'oh I'm fine' and walk away. Nobody's ever said to me 'no you're not'. Do you ever get that feeling where you don't want to talk to anybody? You don't want to smile and you don't want to fake being happy. But at the same time you don't know exactly what's wrong either. There isn't a way to explain it to someone who doesn't already understand. If you could want anything in the world it would be to be alone. People have stopped being comforting and being along never was. At least when you're alone no one will constantly ask you what is wrong and there isn't anyone who won't take 'I don't know' for an answer. You feel the way you do just because. You hope the feeling will pass soon and that you will be able to be yourself again, but until then all you can do is wait. Some people try to understand, but nobody can know what living like this is like. You never know when you wake up, if all will be the same, or if you'll be back in your dark place, again to feel the pain. No one can see the pain what we hide, they're happy for us to keep it inside, our fear is our own; they don't want to know. Why should we involve them; why should it show. Our generation has had no Great war, no Great Depression. Our war is spiritual. Our depression is our lives. So drop the little razor, and pick up your life, forget all the bad things, the pain and the strife. I'm not my usual self being quiet and lonely isn't 'me' crying all night, acting all day this isn't how it's supposed to be. I'm hurting so bad inside I just wish you could see... I'm struggling to be someone that isn't even close to

me. Beware the person who has nothing to lose. In the end, music is your only friend. When your going thru hell... it's best to just keep on going... What's the point in screaming? No ones listening anyway. I'm young and I'm hopeless... I'm lost and I know this... I'm going nowhere fast... that's what they say... I'm troublesome, I've fallen... I'm angry at my Father... it's me against this world and I don't care. She's not the kind of girl who likes to tell the world about the way she feels about herself. Did it surprise you that I am not who you thought I was? Did it surprise you to find that I don't exactly stand for what you thought I stood for all along? Did it surprise you to find that I'm not exactly how I played myself out to be? That the person you thought I was is actually nothing to what I am. Everyone sees who I appear to be but only a few know the real me, you only see what I choose to show there's so much behind my smile you just don't know. I like having low self-esteem it makes me feel special. Take it from someone who's fallen... it's a long way down. They say you need to pray, if you want to go to heaven. But they don't tell you what to say when your whole life has gone to hell. The only thing standing between me and total happiness is reality. The beautiful thing about music is when it hits you, you fell no pain. True strength is holding it together when everyone else would understand if you fall apart. The only thing worse then being hated is being ignored. At least when they hate you they treat you like you exist. There is something beautiful about all scars of

whatever nature. A scar means the hurt is over, the wound is closed and healed, done with. Rock bottom is good solid ground, and a dead end street is just a place to turn around. She is the quietest kind of rebel. She could shut out the whole world, including herself. Our scars have the power to remind us that the past is real. Nothing can stop me now because I don't care anymore. In that one instance I hated everyone in my life, everyone and everything, and me most of all. She was like a flower that had been battered by a storm, but not quite destroyed. Gradually, she began to strengthen and bloom again. She was a girl who knew how to be happy even when she was sad and that's important you know. I'll fake all the smiles, if it stops all the questions. Behind this innocent smile of mine, lay words left unsaid. Words of longing, love, anger, and hate, all repeated inside my head. I've been a loser all my life. I'm not about to change. If you don't like it, there's a door. Nobody made you stay. But its ironic because that's how I live my life. I smile on the outside, and everyone thinks I'm doing fine but I'm always dieing inside, always one step away from the edge you know? I can't be happy to be who I am because I don't know who I am anymore. Be patient and tough; some day this pain will be useful to you. I just realized that were all a bunch of actresses and we've fooled everyone into believing that we're all okay... I'm just waiting for the day when I can convince myself of that.---Jupiter_Girl I smile, I smile all the time, you're just not around to see it. I just like playing games with people, I always hope

there'll be someone smart enough to see through me but you're all so stupid. I'm so happy, cause today I found my friends, they're in my head.---Kurt Cobain I wouldn't be surprised if I was voted most likely to kill everyone at a high school dance.--- Kurt Cobain I'd rather hang out with the losers that would sit and smoke a cigarette than the ones who wanted to throw a baseball.---Kurt Cobain All rock music is good as long as it has passion and feeling---Kurt Cobain If you die you're completely happy and your soul somewhere lives on. I'm not afraid of dying. Total peace after death, becoming someone else is the best hope I've got.---Kurt Cobain QUIET! I can't hear you & all the voices in my head at the same time! If you hold back your feelings because you are afraid of getting hurt, you end up hurting anyway. Not all scars show. Not all wounds heal. Sometimes you can't always see the pain someone feels. When you quit fearing pain, when you learn to love the pain, you will lose all fear of everything. Just because some people don't cry, doesn't mean they're not suffering. I cut to prove to you that you are not the only one that can hurt me. The sky isn't always blue. The sun doesn't always shine. So it's okay to fall apart sometimes. You do it to yourself... and that's why it really hurts. I used to have many faults, not I have only two everything I say and everything I do... I've come to the point where nothing matters anymore, and things I used to care about aren't worth fighting for. I am not what I ought to be, not what I want to be, but I am thankful that I am better than I used to be...

Those who say sunshine brings happiness have never danced in the rain. I'm not afraid of the gun in my hand, I'm not afraid of dying, I'm just afraid of the pain it will bring, and to see my best friends crying. Are you running away from something you don't want? Or running away from something you're afraid to want? I wear my scars proudly. They represent the battles through which I have gone, and I am proud because those battles I have won. You have no idea what I can do. The insane are sane and the sane are insane in a world of craziness. It is a truth universally acknowledged that the moment one area of your life starts going okay, another part of it falls spectacularly to pieces. I believe in whatever gets you through the night. Night is the hardest time to be alive. For me, anyway. It lasts so long, and four am knows all my secrets. Four am is when my dreams die. No matter what you do or say, there's nothing that you can do to make people understand you.---Kurt Cobain Damaged people are dangerous, they know they know they can survive. People dislike alcoholics, but they still drink at parties. People sit in non-smoking section in restaurants, but still enjoy the occasional nicotine jolt. People have strong feelings against self-injurers, but they also take all their emotions out on other people. Such a pretty girl, happy in an ugly place. Watching all the pretty people do lots of ugly things. The apple fall far from the tree she's rotten and so beautiful I'd like to keep her here with me and tell her that she's beautiful she takes the pills to fall asleep and dreams that she's invisible tormented dreams she stays awake recalls when she was capable... Without pain, there would be no suffering, with out suffering we would never learn from out mistakes. To make it right, pain and suffering is the key to all

windows, without it, there's no way of life. If I would kill myself tonight, who would remember me tomorrow? No more joy - No more sadness - No emotion - Only madness. I can't see. I don't feel. I can't touch. I don't heal. There's a fine line between genius and insanity. I have erased this line. Skin is beautiful, don't ruin it with scars just because your life isn't as beautiful. For once life becomes beautiful to you again, your skin wont be so beautiful anymore. Life it seems, will fade away drifting further every day getting lost within myself nothing matters no one else I have lost the will to live simply nothing more to give. I am sad but I'm laughing. Everybody knows that something's wrong but nobody knows what's going on. We all go a little mad sometimes. Haven't you? The question isn't 'who is going to let me'; it's 'who is going to stop me'. And sometimes I have really bad day... when, you know, I just want to hide or scream or bleed or something... Scar tissue has no character. It's not like skin. It doesn't show age or illness or pallor or tan. It has no pores, no hair, no wrinkles. It's like a slip cover. It shields and disguises what's beneath. That's why we grow it; we have something to hide. I only smile in the dark. Every so often I want to dig my fingernails underneath my skin and peel off the face everybody's so used to seeing me in. Every so often I want people to know that I'm not as okay as they think I am. --onceuponatime It wasn't a suicide attempt, it was an escape from everything awful. When we cut, we're in control - we make our own pain and we can stop it whenever we want. Physical pain relieves mental anguish. For a brief moment, the pain of cutting is the only thing in the cutter's mind, and when that stops and the other

comes back, it is weaker. Drugs do that too, and sex, but not like cutting. Nothing is like cutting. To be loved to madness - such was her great desire. Love was to her the one cordial that could drive away the eating loneliness of her days. These cuts are leaving creases. Trace the scars, to fit the pieces, to tell your story, you don't need to say a word. Who am I? I am who I say I am and tomorrow someone else entirely. A pill to make you numb, a pill to you make you dumb, a pill to make you anybody else, but all the drugs in this world wont save her from herself. We're all quite mad here. Ha... ha ha ha ha ha! You may have noticed that I'm not all there myself. If you don't like the way I am, then don't come around me. If you don't like the way that I talk, then don't listen. If you don't like the way I dress, then don't look. But don't waste my time telling me about it. I don't care. Reality has exiled me; I am no longer bound by it's laws. Sometimes you can cry until there is nothing left wet in you. You can scream and curse to where your throat rebels and ruptures. You can pray all you want to whatever god you think will listen. And still, it makes no difference. It goes on, with no sign as to when it might release you. And you know that if it ever did relent... it would not be because it cared.Johnny the Homicidal Maniac Sometimes I sit and watch the ink leak from my pen. It comforts me to know something else bleeds the way I do. It's an interesting feeling, really, to scroll through all the numbers in your phone, and realize that there is no one who will understand. My skin is burnt but it heals my heart, with growing pride Ill wear my scars, I am honored by you hate.--Tera I guess for some people its always a little easier to appreciate the rainy days instead of sunny days... I've lived in this place and I know all the faces. Each

one is different, but they're always the same. They mean me no harm but its time that I face it, they'll never allow me to change... But, I never dreamed home would end up where I don't belong... I'm moving on. Where ever I am I always find myself looking out the window wishing I was somewhere else.---Angelina Jolie There's something about death that is comforting. The thought that you could die tomorrow frees you to appreciate your life now---Angelina Jolie Without pain, there would be no suffering, without suffering we would never learn from our mistakes. To make it right, pain and suffering is the key to all windows, without it, there is no way of life.---Angelina Jolie Do you remember the days when you were a child and simply running outside made you happy? What happened to them? There's a girl in my mirror crying tonight and there's nothing I can tell her to make her feel alright... I can't stop crying... I don't understand, and it's not the loud, screaming crying... it's just the tears continuously roll down my face, and I can't do anything to stop them. Someday I'll fly away. I can't get my wrists to bleed, just don't know why suicide appeals to me. - Alice Cooper This isn't a perfect world. People do get hurt. You smile when you feel like crying. You act like you're ok, when you're falling apart inside. And you try to let go, you try to move on, because you know there's nothing else you could do. I have no clue why I do what I do. It feels good to have cold metal press against my skin as my problems tear at my soul. The blood drips softly and I cry silently. No one will ever understand me except for other people like me. ---cutegoddess01 Close your eyes, and imagine 5, 10, 15 years from now. You are with your husband and maybe 2, 3 or so kids and your a very happy family, and very self-fullfilled and your life is perfect just the way you had always dreamed and hoped, and then your little 5 year old child asks you: "mommy, why do you have all

those white scars on your arm?" and then what will you say? I used to take a razor and pull it down real slow and carefully and watch the blood drop out of my skin so that I could see that I am still alive, or so I could feel real physical pain instead of emotional pain. No you can't say that to your child. and even if you do then your child will learn from you and do the same to themselves when ever they are feeling down. you don't really want that now do you. What you think is what you are. what you peruse becomes your reality. ---Babylon_11 You ask why I say nothings wrong when really everything is. You should know what wrong. Your my friends, your making bad decions and its killing me to see you suffer like you are. You just never see how what your doing effects me because you dont care enough to look and see. ---FastTurtle I cry then I cut, then I cry again, it never ends.--- Tera I was lost. There was nobody for me to talk to about all that you were troubling me with. So I sat alone, with everything inside, and cried myself to sleep. when you talk about feelings, words were too stiff, they were this and not that, they couldn't include all the meanings. In defining, they always left something out.--- White Oleander The skin of a scar is stronger than the original, less aware of pain... Self-injury is a sign of distress not madness. We should be congratulated on having found a way of surviving. When I cut myself, I feel so much better. All the little things that might have been annoying me suddenly seem trivial because I'm concentrating on the pain. Scars are tattoos with better stories. We are male and female. We are artists, athletes, students, and business owners. We have depression, DID, PTSD, eating disorders, borderline personalities, bipolar disorder, or maybe no diagnosis at all. Some of us were abused, some were not. We are straight, bi, and gay. We come from all walks of life and can be any age. We are every single race or religion that you can possibly think of. Our common link is this: We are in pain. We self-injure. And we are not freaks. You see her sitting there and you think 'shes so sad'

but its not that shes sad, shes simply given up on pretending to be happy, shes tired of getting up every morning and putting on her fake smile, telling herself 'today will be better'. She doesnt want to be an inconvenience or a bother anymore...she has stopped looking for the light switch in the dark room she calls her life. ~ Never_The_Star If you forget all else remember just this, there are people who love you and want you happy... without you their life would be empty. In reality, I'm slowly losing my mind. Underneath the guise of smile, gradually I'm dying inside. Friends ask me how I feel and I lie convincingly. Cause I dont want to reveal the fact that I'm suffering. So I wear my disguise till I go home at night and turn down all the lights and then I break down and cry. Everyone is asking me how I feel, how I am and truthly I feel numb. I cant feel anything and honestly I like it. Depression is such a strong emotion, its regret, fear, frustration, isolation, a choice, and sometimes even a form of protection. ~ Never_the_star Loneliness is the human condition. No one is ever going to fill that space. -White Oleander Why don't you just sit down, close your eyes and invent your own world? When you were little you did, even with your eyes open. Sometimes it seems like we're all living in some kind of prison, and the crime is how much we all hate ourselves. It's good to get really dressed up once in a while and admit the truth - that when you look closely, people are so strange and complicated that they're actually beautiful. Possibly even me. As long as you know everything is a lie then you can't hurt yourself.- Manson Do you ever have one of those days where nothing really goes wrong but you feel like you hate the world and the smallest thing that happens can make you break down right there and cry? Cutters are living proof that when the body is ravaged the soul cries out and when the soul is trampled upon, the body bleeds. I'm playing a game I can't win, I keep losing and losing, why do I keep playing? To me it isn't about

winning or losing, I'm just enjoying the game. The drastic steps I'm taking are just an act of desperation, no one's gonna miss me so what the hell. I fought and lied I drank too much. Hurt everyone I ever touched, just how much I hurt you is hard to tell. It's not some kind of cry for help just good bye I wish you well because I love you I'm gonna kill myself. --Tim McGraw I won't leave a note for anyone to find tomorrow they will know what I've done here tonight. --- Tim McGraw Do you ever lay in bed at night hoping you wake up in the emergency room and hear the words "shes not going to make it?" I certainly didn't tell anyone; I didn't advertise that I was doing this, but I didn't necessarily also make sure no one could see that I was injured. In fact, I felt proud of it; I felt good about it. It was like a battle scar: it proved that I had been grievously wounded and survived. When I hid my scars, I did so because I didn't want anyone to think I was a basket case or a mental case and to look down on me or to pity me or to stop hanging out with me - leave me because they couldn't. handle me... You know when you cut yourself really badly, it doesn't hurt at all for awhile you don't feel anything death, our reaction to death is sort of like that you don't feel anything at all and then later on you begin to hurt. Pull the shades - razor blades - you're so tragic. i hate you so but love you more. i'm so elastic - the things you say - games you play - dirty magic. --- The Offspring I did not, you see, want to kill myself. Not at that time, anyway. But I wanted to know that if need be, if the desperation got so terribly bad, I could inflict harm on my body. And I could. Knowing this gave me a sense of peace and power, so I started cutting up my legs all the time. Hiding the scars from my mother became a sport of its own. I collected razor blades, I bought a Swiss Army knife, I became fascinated with different kinds of sharp edges and the different cutting sensations they produced. I tried out different shapes - squares, triangles, pentagons, even an awkwardly carved heart, with a stab wound at its center, wanting to see if it hurt the way a real broken heart could hurt. I was amazed and pleased to find that it didn't. --- Prozac Nation

First time I cut was just to feel the pain, Strange because I didn't feel a thing. --- Kristen (aka KrazyKristen) It wasn't because I wanted to die, I just wanted the pain to finally stop. --- Kristen (aka KrazyKristen) I have to cut because it's the only way I can smile.--Kristen (aka KrazyKristen) Let me give you some advice-- if you are gonna lie about something at least make sure it's worth lying about. --- Kristen (aka KrazyKristen) I've always been the good girl. The girl whose parents that she would grow up and actually become something. But I'm not like that anymore. I never thought I'd drink or snort those pills but I guess I was wrong. Now that I've done it I don't wanna stop. It's like cutting, once you drag that blade across your skin you can't stop. You don't wanna stop. I know you wanted a perfect teenage girl but in reality there isn't one. --- Kristen (aka KrazyKristen) Those feelings that are the most painful are those ones that nobody can explain no quote can describe... and no tears or smiles can make them go away.They're the ones that hurt the deepest the ones that last the longest and take forever to forget about . Sometimes I feel like no one cares. Sometimes I feel like no one is there. Sometimes I want to kill myself. Sometimes I think I need some help. Sometimes I feel like I'm alone. Sometimes I'm in an empty zone. Sometimes I feel like I'm not alive. Sometimes I wonder if I'm deprived. Sometimes I think the world should end. Sometimes I think I have no friends. Sometimes I want to make them see that sometimes I wish I wasn't me... I'm so broken. not half full, not half empty, not ever cracked. I'm just broken. I can't exist anymore. I can barely function. there's nothing left to me. and I don't care. Cutting is a stepping stone for me. All my life I have been put through so much emotional pain and ive let myself just sit and drown in it. I cant physically or emotionally do it anymore. So I cut. It temporaily takes my pain away until I am able to remove myself from all feeling. I am detached from everything right now... I am numb.--- Jupiter-Girl Please don't blame yourself for any of the stupid shit

that I choose to do. None of this is your fault. I'm the one who makes these bad decesions so im the one who pays the consequences.--- Jupiter-Girl They didn't know that she was planning something. Most people thought she was perfectly fine. She was good at pretending...but some people knew she wasn't okay but they didnt realize how bad it was. She would party every weekend. She was border line alcoholic rarely going 48 hours without being 100% sober. She tried finding comfort in anything even if that ment fucking some guy she just met one night while she had been drinking. Everyday was going by as a blur. They didn't know that she cried herself to sleep every night. They didnt know that she had practiced cutting herself so many times. They didnt know that she had written and rewritten letters to all the people she cared about most telling them she loved them and apologizing. She even wrote one to the person who was most important to her, who wouldn't understand what had happened because she was to young. She wanted her to know it wasn't her fault and she loved her dearly. They just didnt know. They found her surrounded... in her own blood. They finally knew... they finally realized that she really wasn't okay and the rumors, and the fake friends, and the guys who liked her for all the wrong reasons, and the family, and the lies, and the unperfect body that she saw that everyone else thought was close to perfect, had gotten to her. She finally had the courage to press down hard enough... and they finally knew that she planned this. It's not how tragically we suffer but how miracously we live. Life and death are balanced on the edge of a razor. I'm not guna give a fuck anymore... If you hurt me, I'm gonna hurt you. That's how it's gonna be from now on... How can you hide from what never goes away? --Prozac Nation One morning you wake up afraid to live. --- Prozac Nation ...it all becomes completely numbing, like so much pounding on a frozen paralyzed limb that bruises but no longer feels. --- Prozac Nation But then I never had to worry about crash landing becuase I never took off. --- Prozac Nation It was like sawdust, the unhappiness: it infitrated

everything, everything was a problem, everything made her cry - school, homework, boyfriends, the future, the lack of future, the uncertainty of the future, fear of future, fear in general - but it was so hard to say exactly what the problem was in the first place - The Dead Girl On top of feeling sad, I also felt guilty. --- Prozac Nation I went home at night and cried for hours because so many people in my life expecting me to be a certain way was too much pressure, as if I'd been held against a wall and interrogated for hours, asked questions I couldn't quite answer any longer. --Prozac Nation I don't care that I don't care, but I do care maybe a little bit about not caring about not caring - but maybe I do feel sorry for all the nice people whose efforts are wasted on a waste case like me. --- Prozac Nation The have no idea what a bottomless pit of misery I am. --- Prozac Nation I did not, you see, want to kill myself. Not at that time, anyway. But I wanted to know that if need be, if the desperation got so terribly bad, I could inflict harm on my body. And I could. Knowing this gave me a sense of peace and power, so I started cutting up my legs all the time. Hiding the scars from my mother became a sport of its own. I collected razor blades, I bought a Swiss Army knife, I became fascinated with different kinds of sharp edges and the different cutting sensations they produced. I tried out different shapes - squares, triangles, pentagons, even an awkwardly carved heart, with a stab wound at its center, wanting to see if it hurt the way a real broken heart could hurt. I was amazed and pleased to find that it didn't. --- Prozac Nation There were times when she thought she didn't need to do it anymore, times when she thought she was done with it. Cutting made her feel like she was... special, like she had something. She liked having the ability to inflict pain whenever she wanted, and she liked that she could stop it. Not that she really wanted to. When she thought she was done, it made her empty, unsure if this was really living. She would ask herself if this was happiness, and told herself that if it was, she hated it. Cutting made her feel different then everyone else, but she also knew that other people did it for the same reasons, that made her feel that she was a part of something. Then there were times when the tears from her eyes burned a path down her cheek, and her throat was so tight she couldn't scream no matter how much she tried. Those times

she would find relief only by cutting up her skin and bleeding out all the painful screams. The pain of living altogether flowed from one simple cut. She didn't care where she cut, arms, legs, stomach, or wrists. As long as she keeps cutting she can live to tomorrow. You cry yourself to sleep at night I've heard your strangled sobs piercing through the darkness. wishing I could help. You cut your self to take control. I've seen mangled scars running up your arms as plentiful as veins. Wishing I could help You starve your self to grasp what's left I've seen you, thin and not even trying to live. Wishing I could help through all these things I've seen you, wished I could take away the pain. then you took it away your self. I wished I could've helped. Unperfect. That's what you can call me. After all I am me, and don't fit a certain category. I'm just a girl who lives life day by day and always manages to put a smile on my face. Even if that day I'm a complete mess. What is depression really? Is there one concrete definition, or has the meaning loosened as our generation has continued it's downhill descent? To me, depression is simply my life. I'm not suicidal. I'm not a cutter. I don't hate the world. I don't dress completely in black. I'm just sad. I've been sad for what feels like my entire life, but that's not true. I was happy once and I can vaguely remember what it felt like, but I can't touch it. I can't get that happiness back, I don't know how. That's what depression is to me, knowing what happiness is, but never being able to touch it, to feel it.- Jenny Leigh One of the worst feelings in the world is loneliness. Sitting in the dark by yourself in the wee hours of the night gently crying. Nobody knows what's going on with you. How could anybody realize what's happening? Everybody you know is resting peacefully in their bed awaiting the new day tomorrow. But for you, there's no difference in the days. They pass monotonously. And before you know it, it's all gone. When it seems like everything is wrong and will never be right again remember even the darkest nights must give way to day.

The one person who really knows me best says I'm like a cat, the kind of cat that you just can't pick up and throw into your lap. Yeah the kind who doesn't mind being held only when it's her idea. Yeah the kind who feels what she decides to feel when she's good

and ready to feel it. Now I am prowling through the backyard and I am hiding under the car and I've gotten out of everything I've gotten into so far and I eat when I am hungry and I travel alone. Just outside the glow of the house is where I feel most at home. She cuts herself. Never too deep, never enough to die. But enough to feel the pain. Enough to feel the scream inside. You might imagine that a person would resort to selfmutilation only under extremes of duress, but once I'd crossed that line the first time, taken that fateful step off the precipice, then almost any reason was a good enough reason, almost any provocation enough. Cutting was my all-purpose solution. My scars ought to be a charm bracelet of memonics, each a permanent reminder of its precipitating event, but maybe the most disturbing thing I can say about the history of my cutting is that for the most part I can't even remember the whens and the whys behind those wounds. It didn't take much to make me cut. Frustration, humiliation, insecurity, guilt, remorse, loneliness... I cut 'em all out. They were like a poison, caustic and destructive, as though lye had been siphoned into my veins. The only way I could survive them, I thought, was to keep draining them from my blood. How many cuts could I count? How many could I place in time and context? I had to admit that I couldn't remember the occasion of almost any of them, their catalysts, whether epic or mundane, completely obscured by time. So many moments of supposedly unendurable pain, now utterly forgotten. u start to think, Maybe I don't need this anymore. Maybe I never did I was trying to get equilibrium from two extremes: either I was so upset that I had to cut myself to relieve it, or I was so numb that I had to cut myself to get back to being there. Let the blood run down your arms then try and tell me everything's okay. I take the blade and run it gently against my skin, it cuts in deeper and deeper, the blood bursts out and slowly runs down my arm then it stops and the pain goes away. Cutting doesn't solve anything or take the pain away, but for those few seconds everything is Okay... Some times in stead of cutting an X on my wrist I make a cross so that the Lord can forgive me for destroying my body, and I also pray that the pain

stops as the blood slowly drips onto my sheets. Crimson tears run down my arm, All the pain and all the harm. My only way to let it out, I wanna scream, I wanna shout. But I dont make a sound, I keep it inside. I wanna break out, but instead I hide. I sit in my room, and hide in my shell, The life that Im living, my own private hell. The crimson tears, down my arm they run. I look down at my arm, what have I done? -- Bleedinginside Every word, another scar, Some people say I cut for attention, Attention is the last thing I want, I tell them I've got my reasons, But what they don't know is, They are the reason I cut, I walk the halls and people talk, Their harsh words cut in deep, Don't they know what they're doing, Every word they say is another scar on my wrist. As she's breaking down she grabs her razor and she whispers... this time I'm not okay... I never knew that one singe blade could mess up my life... There is nothing sadder than a child who has barely seen the world, yet who has seen enough of it to know that he does not wish to be a part of it... You're scared because you don't understand... I'm scared because I do. I'm okay... isn't that what I'm suppose to say? Depression is merely anger minus the enthusiasm. I don't cut... I fell... I don't cut... My dog bit me... I would always tell you, These easy lies. When you really didn't know, I do cut, and cry, and lie. You don't know me, So don't even try. --- Dying inside The razor moves along her wrist like a river, so peacefully, as that red water starts to escape, its hard to make it stop. Nothing is more dear to them than their own suffering - they are afraid that they will lose it - They feel it, like a whip cracking over their heads, striking them and yet befriending them; it wounds them, but it also

reassures them. --- Ugo Betti Why? Why do I feel so gone? I am now so distant I just don't belong. Now I'm ripped away from existence. I've become so transparent that I lost all substance. Sitting nowhere, breathing fake air. We don't feel anymore, so we can't care. Its about time I clear my throat. Let the hellish screams out till I begin to float. I'd run a million miles from here, just to get out of this cage and escape from fear. You know you're screwed when you crave pain, you wanna bleed all throughout your brain. The blood in my veins is proof of life. I'm not sure if its there, so I reveal it with a knife. Not me any more, don't know myself. Prisoner in my own skin, I no longer comprehend health. It's all in the family they used to say. It's all in the family so it must be ok. They hurt and rape her, they slash and tear her, they kill and torture, they love the terror. We are our own army so lets retaliate. Fight, destroy, show them real hate. Look at the fire in her eyes. That roaring beast never hides. She lost all she ever had. Blood seeps through her skin cause it hurts so bad. Her shattered heart pounds against her breast, scattered pieces cutting holes in her chest. Slowly she fades as she quickly she drowns. Covered in guilt, sequestered from sounds. Tilting on the edge, about to fall off. Her mind is so lacerated it has become leathery and soft.-Anonymous That was when I cut my arms with a razor blade as a means of creative expression. I only did it lightly, just grazing the skin, to see the way the blood would bleed out, to make myself look tougher. Not like some of those kids who keep going deeper and deeper, wondering what they look like down to the bone, because it's a world that's so close and yet so far and so dangerous and so much their own. The only world that is their own. How will you know I am hurting, If you cannot see my pain? To wear it on my body Tells what words cannot explain. It requires more courage to suffer than to die. I'm freezing, I'm starving, I'm bleeding to death, Everything's fine. 'But I don't want to go among mad people,' Alice remarked. 'Oh, you can't help that,' said the Cat. 'We're all mad here. I'm mad. You're mad.' 'How do you know I'm mad?' said Alice. 'You must be," said the Cat. 'or you wouldn't have come here.'"

Insanity is knowing that what you're doing is completely idiotic, but still, somehow, you just can't stop it. "...occasionally I wished I could walk through a picture window and have the sharp, broken shards slash me to ribbons so I would finally look like I felt." - Prozac Nation Don't let yourself become so angry that you stop loving, because one day, you'll wake up from that anger, and the person you love will be gone. Tough times don't last but tough people do. fuck your past don't let is fuck with you... That's the problem with cutting. Once you start, you can't stop. It's addicting, cutting is my drug. It serves its purpose perfectly. Once I cut, I forget about everything that has been wrong. All that is left is my concentration on my cut. I forget about everything but the pain. Pain has become my world. --ConcretAngel 162

Here some great web sites for quotes: http://www.freeweb.com/lindsay730/quotes.htm http://www.selfinjury.net/doyousi/quotes/quote.php?action=all http://www.palace.net/~llama/psych/injury.html
I love a girl, but she doesn't hold the feelings as I do.... I know I am lacking behind to her expectations however I love her.. Nothing in this world could compensate me other than she. I love you, and I love you.

A2 Markets & Market Systems

Cost Benefit Analysis

In a world of finite public and private resources, we need a standard for evaluating trade-offs, setting priorities, and finally making choices about how to allocate scarce resources among competing uses. Cost benefit analysis provides a way of doing this. What is cost benefit analysis? Cost benefit analysis (COBA) is a technique for assessing the monetary social costs and benefits of a capital investment project over a given time period. The principles of cost-benefit analysis (CBA) are simple: 1. Appraisal of a project: It is an economic technique for project appraisal, widely used in business as well as government spending projects (for example should a business invest in a new information system) 2. Incorporates externalities into the equation: It can, if required, include wider social/environmental impacts as well as private economic costs and benefits so that externalities are incorporated into the decision process. In this way, COBA can be used to estimate the social welfare effects of an investment 3. Time matters! COBA can take account of the economics of time known as discounting. This is important when looking at environmental impacts of a project in the years ahead Uses of COBA COBA has traditionally been applied to big public sector projects such as new motorways, bypasses, dams, tunnels, bridges, flood relief schemes and new power stations. Our example later considers some of the social costs and benefits of the new Terminal 5 for Heathrow airport. The basic principles of COBA can be applied to many other projects or programmes. For example, public health programmes (e.g. the mass immunization of children using new drugs), an investment in a new rail safety systems, or opening a new railway line. Another example might be to use COBA in assessing the costs and benefits of introducing congestion charges for motorists in London. Or the costs and benefits of the New Deal programme designed to reduce long-term unemployment. Cost benefit analysis was also used during the recent inquiry into genetically modified foods. Increasingly the principles of cost benefit analysis are being used to evaluate the returns from investment in environmental projects such as wind farms and the development of other sources of renewable energy, an area where the UK continues to lag behind. Because financial resources are scarce, COBA allows different projects to be ranked according to those that provide the highest expected net gains in social welfare - this is particularly important given the limitations of government spending. The Main Stages in the Cost Benefit Analysis Approach At the heart of any investment appraisal decision is this basic question does a planned project lead to a net increase in social welfare? o o Stage 1(a) Calculation of social costs & social benefits. This would include calculation of: o Tangible Benefits and Costs (i.e. direct costs and benefits) o Intangible Benefits and Costs (i.e. indirect costs and benefits externalities) This process is very important it involves trying to identify all of the significant costs &

o o o

benefits Stage 1(b) - Sensitivity analysis of events occurring this relates to an important question - If you estimate that a possible benefit (or cost) is x million, how likely is that outcome? If you are reasonably sure that a benefit or cost will occur what is the scale of uncertainty about the actual values of the costs and benefits? Stage 2: - Discounting the future value of benefits - costs and benefits accrue over time. Individuals normally prefer to enjoy the benefits now rather than later so the value of future benefits has to be discounted Stage 3: - Comparing the costs and benefits to determine the net social rate of return Stage 4: - Comparing net rate of return from different projects the government may have limited funds at its disposal and therefore faces a choice about which projects should be given the go-ahead

Evaluation: Criticisms of COBA There are several objections to the use of CBA for environmental impact assessment: 1. Problems in attaching valuations to costs and benefits: Some costs are easy to value such as the running costs (e.g. staff costs) + capital costs (new equipment). Other costs are more difficult not least when a project has a significant impact on the environment. The value attached to the destruction of a habitat is to some priceless and to others worthless. Costs are also subject to change over time I.e. the construction costs of a new bridge over a river or the introduction of electronic road pricing 2. The CBA may not cover everyone affected (i.e. all third parties) inevitably with major construction projects such as a new airport or a new road, there are a huge number of potential stakeholders who stand to be affected (positively or negatively) by the decision. COBA cannot hope to include all stakeholders there is a risk that some groups might be left out of the decision process a. Future generations are they included in the analysis? b. What of non-human stakeholders? 1. Distributional consequences: Costs and benefits mean different things to different income groups - benefits to the poor are usually worth more (or are they?). Those receiving benefits and those burdened with the costs of a project may not be the same. Are the losers to be compensated? To many economists, the equity issue is as important as the efficiency argument. 2. Social welfare is not the same as individual welfare - What we want individually may not be what we want collectively. Do we attach a different value to those who feel passionately about something (for example the building of new housing on greenfield sites) contrasted with those who are more ambivalent? 3. Valuing the environment: How are we to place a value on public goods such as the environment where there is no market established for the valuation of property rights over environmental resources? How does one value nuisance and aesthetic values? 4. Valuing human life: Some measurements of benefits require the valuation of human life many people are intrinsically opposed to any attempt to do this. This objection can be partly overcome if we focus instead on the probability of a project reducing the risk of death and there are insurance markets in existence which tell us something about how much people value their health and life when they take out insurance policies. 5. Attitudes to risk e.g. a cost benefit analysis of the effects of genetically modified foods a. Precautionary Principle: Assume toxicity until proven safe 1. If in doubt, then regulate b. Free Market Principle: Assume it is safe until a hazard is identified

1. If in doubt, do not regulate. Despite these problems, most economists argue that CBA is better than other ways of including the environment in project appraisal. Discounting the future Would you rather have 1000 of income today or 1000 of income in the future (say in 3 years?). The answer is probably now, because 1000 in three years time is unlikely to buy as many goods and services as it does now (because of inflation). And also because 1000 put into a savings account today will yield interest. Discounting is a widely used technique as part of cost benefit analysis. The technique of discounting reflects the following: The value of a cost or benefit now > the value of a cost or benefit in future years Discounting reflects this by reducing all future costs and benefits to express them as todays values. The key question is: How do you choose an interest rate for reducing future costs to give them a present value today? Setting a general discount rate for new projects has important implications for the environment: 1. A low discount rate is often favoured by economists since they argue that investing a high proportion of current income is a good way of providing for the future 2. A high discount rate may also be favoured since it discourages investment (and by implication environmental damage) in the present Most projects have lifetimes of 20-30 years with many of the big costs arising early in a project e.g. from construction whereas the stream of benefits from a project occur over a much longer period of time. But for many huge construction projects, some of the costs only become apparent in the long run. Consider the building of a new nuclear power station. Environmentalists would argue that there is a long list of costs from waste management and decommissioning which stretch over 100 years into the future whereas no social benefits exist to offset these costs beyond year 30 or 40 (where the nuclear power station might reasonably be expected to be ready for closure). The value of decommissioning costs over 100 years away is almost negligible no matter what discount rate we use. This makes discounting difficult to justify Revealed Preference Valuing the Benefits from a Project According to some economists, the valuation of benefits and costs used in COBA should reflect thepreferences revealed by choices which have actually been made by individuals and businesses in different markets. Consider this example: 20 employees are given the chance of using a new car park close to work for 5 per day or parking further away from work for free but involving an extra 10 minutes walk. Their decisions reveal how much they value time. If they all choose to spend the 5 per day on car parking, this reveals that time is more important to them than 50p per minute. If only half take up the car parking option, this reveals that average value of time to them was 50p per minute. Hard choices made in markets are the best guide to private benefit. Information contained in the demand curve tells us much about how much people are willing and able to pay for something. This is important in revealed preference theory. When consumers make purchases at market prices they reveal that the things they buy are at least as beneficial to them as the money they relinquish.

Cost benefit analysis in practice Heathrow Terminal 5 The debate over whether there should be a fifth terminal at Heathrow airport has fierce and longlasting! The official planning enquiry reported after 5 years and having cost many millions of pounds. The rival arguments at the inquiry highlighted many examples of environmental impact (externalities) - noise, air quality, rivers etc. - but concluded that these were not enough to refuse planning permission and that the new terminal project should go ahead. The case for terminal 5 1. Economic growth: Demand for air travel in south-east England is forecast to double in the next 20 years, making expansion vital many thousands of jobs and businesses depend on Heathrow airport expanding to provide sufficient supply capacity to meet this growing demand. An increase in the capacity of Heathrow will make best use of airport's existing infrastructure and land (nearly 3,000 acres). 2. The economy and trade: The UK will lose airlines and foreign investment to European rivals if it does not meet demand. The benefits of a world-beating industry would be diminished many sectors of our aviation industry have a comparative advantage and add huge sums to our balance of payments 3. Jobs: The terminal 5 project will create or safeguard an estimated 16,500 jobs, as well as creating 6,000 construction jobs during the building phase this will have multiplier effects on the local / regional and national economy 4. Transport: The terminal will be the centre of a world-class transport interchange, with new Tube and rail links. Car traffic would rise only slightly the social costs of increased traffic congestion have been exaggerated by the environmentalists 5. Environment: The site earmarked for terminal 5 is currently a disused sludge works, and any displaced wildlife and plant life will be carefully relocated. The noise climate around Heathrow Airport has been improving for many years, even though the number of aircraft movements has increased considerably partly due to the phasing out of older, nosier aircraft 6. Noise and night flights: BAA promises no increase in overall noise levels or in night flying. The number of flights would rise only 8% Objections to Terminal 5 1. Growth: BAA forecasts are misleading and will lead to uncontrolled expansion, rather than targeting better solutions such as using existing space at other airports. 2. The economy: Heathrow already has the biggest capacity in Europe, and ambitions to extend its lead are merely "commercial prestige" rather than having long term macroeconomic benefits 3. Jobs: Only 6,000 jobs will be created - a tiny fraction of all the new jobs in the South East. Local studies say jobs will increase anyway even without a fifth terminal 4. Transport: There will be a significant increase in road-widening and car parks to cater for the tens of thousands of extra car journeys to the airport every year 5. Environment: Air pollution will increase significantly, and hundreds of acres of wildlife and Green Belt land will be lost forever. Plus the environmental costs of increased traffic congestion 6. Noise and night flights: More flights will mean more noise under the flight paths, and the pressure for controversial night flights and a third runway will increase the regulators will be captured by the airlines and airport authorities and will eventually be pressurized into giving way on allowing more night time flights These are just a few of the arguments raised for and against the Terminal 5 project. For more news on the project consult www.baa.com/main/airports/heathrow/terminal_5_frame.html Case study - A national smoking ban According to a cost benefit analysis performed for the Chief Medical officer's Annual Review of

Public Health published in July 2004, a ban on smoking in public places would benefit the economy by between 2.3bn and 2.7bn a year. The COBA argued that a ban on smoking in pubs, restaurants and cafes would not reduce profits in the leisure, catering and hospitality industry. However critics of the new study responded by saying that the assumptions behind the economic model, remained unpublished.

Annual Benefits Health benefits (reduced absenteeism) Health benefits (reduced costs of healthcare) Health benefits (averted deaths from second-hand smoke amongst employees) Health benefits (reduced uptake, particularly new young employees) Health benefits (smoking cessation) Safety benefits (damage, deaths, injuries) Safety benefits (cost to fire services) Safety benefits (administration costs) Cost savings to NHS from smoking cessation Cleaning costs and damage to equipment avoided Production gains Total Annual Costs Production losses (smoking breaks) Losses to continuing smokers (loss of satisfaction) Losses to quitters (loss of satisfaction) Losses to the Treasury Total

million 70 140 4 21 550 1600 57 0.2 6.3 Not estimated 100 340 680 2700 - 3100 million 430 155 550 1145

To recap, cost benefit analysis is basically an appraisal technique that tries to place monetary values on all benefits arising from a project and then compares the total value with the project's total cost. It has numerous potential applications although there are inherent difficulties with the issue of valuation. Essentially the process of COBA is a comparative one, so that we can perhaps make judgements about which projects from a limited choice should be given the go ahead.