A Government Is Considering Undertaking One or More Construction Projects

question 26

Multiple Choice

A government is considering undertaking one or more construction projects. The estimated marginal costs and benefits of each project are given in the table. Refer to the above table and information. What is the total amount that the government should spend on construction projects?

• A) $8 million
• B) $14 million
• C) $19 million
• D) $37 million

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Definitions:

Income

The financial gain earned by an individual or a company, usually measured over a specific time period and derived from various sources like sales or investments.

Construction Expense

Costs directly related to the construction of a building or infrastructure, including materials, labor, and other expenses incurred during the process of building.

Percentage-Of-Completion Method

An accounting technique used to recognize revenue and expenses of long-term contracts as a percentage of work completed during the period.

Actual Construction Costs

The total expenses incurred during the construction of a building or infrastructure, including materials, labor, and any other costs.