In Cost-Benefit Analysis Associated with Public Projects, All Costs and Benefits

question 16

Multiple Choice

In cost-benefit analysis associated with public projects, all costs and benefits should be evaluated in terms of

• A)market values.
• B)social values.
• C)marginal willingness to pay.
• D)market supply and demand.
• E)profitability.

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Definitions:

Sustainable Growth Rate

Refers to the maximum growth rate a firm can achieve without needing to increase its financial leverage.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in dividends, represented as a percentage of the company's total earnings.

Retained Earnings

Retained earnings are the portion of a company's net profits that are kept within the company instead of being paid out to the shareholders as dividends. This reinvestment is often used for business expansion or to pay off debt.

External Financing Need

The amount of funding required by a firm to cover investments and growth not financed by internal cash flows.