Refer to the Table Below A)$4
B)$5
C)$9
D)$10

question 54

Multiple Choice

Refer to the table below. The average benefit of 4 units of activity is: $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Units of } \\\text { Activity }\end{array} & \begin{array} { c } \text { Total } \\\text { Cost }\end{array} & \begin{array} { c } \text { Total } \\\text { Benefit }\end{array} \\\hline 0 & \$ 0 & \$ 0 \\\hline 1 & \$ 2 & \$ 12 \\\hline 2 & \$ 6 & \$ 22 \\\hline 3 & \$ 12 & \$ 30 \\\hline 4 & \$ 20 & \$ 36 \\\hline 5 & \$ 30 & \$ 40 \\\hline 6 & \$ 42 & \$ 42 \\\hline 7 & \$ 56 & \$ 43 \\\hline\end{array}$$

• A)$4
• B)$5
• C)$9
• D)$10

Recognize the variability and uncertainty in project outcomes and the limitations of financial analysis tools.

Grasp the concept and importance of net present value (NPV) in project evaluation.

Understand the concept of payback period and its utility in assessing investment decisions.

Identify scenarios where a project may have multiple IRRs and understand the implications for project evaluation.

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Definitions:

Bubble Gum

A type of chewing gum that is designed to be more elastic so that it can be blown into bubbles by the chewer.

Utility Function

A mathematical representation of how consumers rank different bundles of goods based on the satisfaction or utility those goods provide.

Indifference Curve

A graphical representation of different bundles of goods between which a consumer is indifferent, showing the combinations of two goods that give the consumer the same level of satisfaction.

Horizontal Axis

In a graph or chart, the horizontal axis is typically used to represent the independent variable or the base measurement.