What Is the Benefit Cost Ratio for a Project Costing

question 3

Multiple Choice

What is the Benefit Cost Ratio for a project costing $200,000 in the first year no discount) that produces a net benefit of $50,000/year for five years when the discount rate is 5%?

• A) $216,475
• B) $16,475
• C) 1.0824
• D) 4 years

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Definitions:

Urban Land

Areas of land characterized by higher population density and vast human features in comparison to areas surrounding it, often dedicated to commercial, residential, and infrastructure use.

Fixed

Something that is constant or unchangeable over a certain period of time, such as a fixed interest rate.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activity.

Risk-Bearing

The assumption of the risk and uncertainty involved in an enterprise or investment.