Benefit-Cost Ratio Is Calculated By

question 62

Multiple Choice

Benefit-cost ratio is calculated by:

• A)dividing the present value of future net cash flows by the initial outlay.
• B)dividing the present value of cash flows by the working capital.
• C)dividing the present value of future net cash flows by the sum of initial outlay and the working capital.
• D)dividing the total cash flows by the initial outflow.

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Definitions:

Natural Resources

Assets that are found in nature and are used for economic gain, such as oil, forests, minerals, or water.

Depletion Expense

An accounting approach for allocating the cost of extracting natural resources from the earth over the period of their extraction.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature.

Salvaged Materials

Materials that have been recovered or repurposed from obsolete or discarded sources, often used in manufacturing or construction.