Which of the following DOES NOT agree with the definition/description of B/C ratio? A. B/C ratio can have a value less than 0, but the project is not economically feasible. B. A B/C ratio less than 1 means that the benefits are inferior of the costs. C. If conventional B/C ratio is less than 1, so does the modified B/C ratio. D. If the annual costs = annual benefits, the conventional and modified B/C ratios are equal to 0. E. None of these

Which of the following DOES NOT agree with the definition/description of B/C ratio? A. B/C ratio can have a value less than 0, but the project is not economically feasible. B. A B/C ratio less than 1 means that the benefits are inferior of the costs. C. If conventional B/C ratio is less than 1, so does the modified B/C ratio. D. If the annual costs = annual benefits, the conventional and modified B/C ratios are equal to 0. E. None of these

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth

Section: Chapter Questions

Problem 17SQ

See similar textbooks

Similar questions

a. Based on PW method, Design Z is more economical. b. The modified B/C ratio of Design Y is The modified B/C ration of Design Z is (Round to two decimal places) (Round to two decimal places) c. The incremental B/C ratio is (Round to two decimal places) Therefore, based on the B/C ratio method, Design Z is more economical d. The discounted payback period of Design Y is The discounted payback period of Design Z is years (Round to one decimal place) years (Round to one decimal place) Investment cost Annual revenue Annual cost Useful life Salvage value Net PW Therefore, based on the payback period method, Design y would be preferred. (e) Why could the recommendations based on the payback period method be different from the other two methods? ⒸA. because the payback period method ignores the cash flows after the payback period O B. because the payback period gives more weight to the cash flows after the payback period C Design Y Design Z $140,000 $275,000 $57,659 $96.354 $17.618 $31,687 15…
1. If all individual B/C ratios of MEAS are less than 1.00, then the preferred option is to "Do Nothing". 2. The concept of individual projects stems from the B/C ratio each project has to offer. Once it is feasible (i.e., BC > 1), MEAS are born.
Where is the salvage value placed in a conventional B/C ratio? Why? How is it handled mathematically?
In a modiﬁed B/C ratio: Select one: a. M&O costs are put in the denominator. b. M&O costs are put in the numerator. c. Beneﬁts are subtracted from costs d. Dis-beneﬁts are put in the denominator
In a modified B/C ratio: Select one: a. M&O costs are put in the denominator. b. Dis-benefits are put in the denominator c. Benefits are subtracted from costs d. M&O costs are put in the numerator.
For a complete and correct incremental B/C analysis method for multiple alternatives, which of the following does the method NOT require? a. Čalculation of the B/C ratio of each alternative b. The identification of all relevant alternatives c. Ranking the order of the projects (smallest to largest denominator) d. Calculation of the B/C ratio for incremental cash flows
A manager wants to compare between two alternatives by the B/C method; if the overall B/C ratio for both alternatives is calculated to be exactly 1.0, which alternative should the manager select? Select one: a. do nothing alternative b. Select both alternatives c. Select the alternative that has the higher cost d. Select the alternative based on the probability to occur
1. Four independent public sector projects A, B, C and D were evaluated using the B/C ratio. The results were 0.85, 1,24, 0.75 and 0.55, respectively. Which among these projects should you recommend and why? State your assumptions. Explain your answer exhaustively.
It asks for modified B/C ratio.
In calculating a Benefit-Cost (B-C) ratio, the analyst needs to classify certain cash flows as either added benefits or reduced costs. Which of the following statements best describes the impact on the outcome of the analysis if a particular cash flow is classified as an added benefit rather than a reduced cost? (a) The larger numerator will result in a B-C calculation that is too high. (b) The larger denominator will result in a B-C calculation that is too low. (c) There will be no impact on the acceptability of the B-C ratio. (d) The B-C ratio will always be equal to 1.0.
From the following data, use the conventional B/C ratio for a project that has a 20-year life to determine if it is economically justified. Use an interest rate of 8% per year. Consequences To the People Annual benefits = $135,000 per year Annual disbenefits = $10,000 per year The B/C ratio is The project is [[(Click to select) To the Government First cost = $700,000 Annual cost Annual savings $141,000 per year $30,000 per year E =
Question # 14: Economic "Sustainability" and Environmental “Impact" Analysis : A country of 150 million Population with a per-capita income (A) of $ 25,000.00/year, Technological Capability Index ( T ) = .70 or 70%, with a skilled workforce (WF) of 75 million people ~ o Calculate the "SUSTAINABILITY IMPACT" and/or Economic viability of that country ?