Which of the Following Statements Correctly Relates to Project Appraisal

question 12

Multiple Choice

Which of the following statements correctly relates to project appraisal?

• A) The effect of a new project on other parts of a business is irrelevant when trying to decide whether to go ahead with the new project.
• B) Changes in working capital as a result of implementing a project should be included in the project appraisal.
• C) Depreciation is a legitimate cost of a project and should be included in a project appraisal.
• D) The costs of surveys and feasibility studies incurred prior to the decision to implement a project should be included in the project appraisal, as they are a cost of the project.

---

Definitions:

Binding Price Floor

A government-imposed price control or limit that sets a minimum price for a good or service, above the equilibrium price, causing a surplus in the market.

Quantity Supplied

The amount of a good or service that producers are willing to sell at a given price over a certain period of time.

Quantity Demanded

The overall volume of a good or service that customers are ready and financially able to acquire at a certain price point.

Price Floor

A government-imposed minimum price charged for a commodity, intended to ensure fair conditions for producers.