The Following Data Are for a Series of Increasingly Extensive

question 18

Multiple Choice

The following data are for a series of increasingly extensive flood control projects: $\begin{array}{c}\begin{array}{lll}\\\\\text {Plan A= Levees}\\\text {Plan B = Small Reservoir}\\\text {Plan C = Medium Reservoir}\\\text {Plan D= Large Reservoir}\\\end{array}\begin{array}{c}\text {Total Cost}\\\underline{\text {Per Year}}\\\$ 10,000 \\24,000 \\44,000 \\72,000\end{array}\begin{array}{c}\text {Total Benefit}\\\underline{\text {Per Year}}\\ \$ 16,000 \\36,000\\52,000\\64,000\\\end{array}\end{array}$
Refer to the data.For Plan D marginal costs and marginal benefits are:

• A) $72,000 and $64,000 respectively.
• B) $28,000 and $12,000 respectively.
• C) $24,000 and $18,000 respectively.
• D) $16,000 and $28,000 respectively.

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Definitions:

Capital Gains Yield

The price appreciation component of the total return on an investment, calculated as the rise in the investment's price divided by its initial price.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Real Rate of Return

The annual percentage return realized on an investment, adjusted for changes in prices due to inflation or other external factors.

Inflation Rate

The pace at which prices for goods and services elevate overall, causing the value of purchasing power to drop.