Use the Following Scenario to Answer This Question

question 22

Multiple Choice

Use the following scenario to answer this question. A large lending institution is evaluating the long-term pros and cons of building a hydroelectric dam in the Amazon rainforest. First, the lending institution is identifying the appropriate factors and then quantifying them. The factors include, but are not limited to, the direct expenses of building the dam, the lost opportunities from placing a dam on the river, and the profit from the dam. Also included is an analysis of who will be affected by the dam.
-What is the name of the process the lending institution is going through?

• A) A long-term analysis.
• B) A supply-demand analysis.
• C) A tangible-intangible cost analysis.
• D) A benefit-need ratio analysis.
• E) A cost-benefit analysis.

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Definitions:

Managers

Managers are individuals in an organization responsible for planning, directing, and overseeing the operations and fiscal health of a business unit, department, or an entire company.

Style

In investing, refers to the distinctive characteristics or approach of an investment, such as growth, value, or income.

Dollar-Weighted Return

A method of calculating an investment's return that takes into account the timing and amount of capital inflows and outflows.

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.