Present Values of Alternative Projects of Different Lengths of Time

question 8

Multiple Choice

Present values of alternative projects of different lengths of time cannot be compared directly because

• A)the net benefits must be analyzed carefully in the more distant future
• B)the discounted net benefits in more distant years will be smaller, all else equal
• C)the net benefits can be compared directly.The premise of this question is incorrect.
• D)If a project lasting for fewer years can be repeated, its present value will be underestimated using standard analysis

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Definitions:

Conversion Efficiencies

The ratio of useful energy output to total energy input in a system, measuring how effectively energy resources are converted and used.

Biomass Fuels

Renewable energy derived from organic materials such as wood, waste, and alcohol fuels used for generating electricity or producing heat.

R-value

A measure of thermal resistance, indicating the effectiveness of insulation materials in preventing heat transfer.

Canadian Government

The federal administration of Canada which operates under a parliamentary system within a constitutional monarchy.