Which One of the Following Indicators Offers the Best Assurance

question 92

Multiple Choice

Which one of the following indicators offers the best assurance that a project will produce value for its owners?

• A)PI equal to zero
• B)Negative rate of return
• C)Positive AAR
• D)Positive IRR
• E)Positive NPV

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Definitions:

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service, considering both private benefits and externalities.

Marginal Benefit Curve

The Marginal Benefit Curve is a graphical representation showing how the benefit or utility from consuming each additional unit of a good decreases as more units are consumed.

Government Intervention

Regulatory actions taken by a government in order to affect or interfere with decisions made by individuals, groups, or organizations regarding economic and social matters.

Marginal Cost

The cost of producing one additional unit of a product or service.