In Evaluating Public Programs, Benefit-Cost Analysis

question 33

Multiple Choice

In evaluating public programs, benefit-cost analysis:

• A) takes into account only the benefits that society gains from public programs.
• B) states that a program should be undertaken only if it generates revenue.
• C) states that a program should be undertaken only if total benefits exceed total costs.
• D) takes into account only the direct costs of the program.
• E) states that a program should be undertaken only if there are no indirect costs.

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Definitions:

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, or equipment.

Dividend Increase

An increase in the amount of payment made by a corporation to its shareholders, usually realized when the company has achieved additional profits.

Additional Financing

Funds that are raised by a company through borrowing or issuing new equity, in addition to its existing capital.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; the higher the turnover, the better.