Using the Benefit-Cost Ratio the Decision Rule Is to Accept

question 25

Multiple Choice

Using the benefit-cost ratio the decision rule is to accept projects with a benefit-cost ratio:

• A)equal to 1.
• B)less than 1.
• C)greater than the opportunity cost.
• D)greater than 1.

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Definitions:

Interest Rate

The fraction at which a lender charges interest to a borrower for the amount of money lent.

Investment Guaranteed

A financial product promising the return of the principal amount plus predetermined earnings, minimizing risk for the investor.

Investment Value

The worth of an asset or security at a specific point in time, taking into account factors such as market conditions and risk.

Interest Earned

The amount of money earned over a period of time through investments or savings that accrue interest.