Mastering Benefit-Cost Ratio

$A = P \cdot \frac{{(1+i)^n - 1}},{{i(1+i)^n}}$ (correct)

$B/C = \frac{{P \cdot (1+i)^n - P}},{{i(1+i)^n}}$

$B/C = i \cdot \frac{{(1 + i)^n}},{{(1+i)^n - 1}}$

$A = P$

When the present value of benefit is greater than the present value of cost

When the benefit-cost ratio is greater than or equal to 1.0 (correct)

When the benefit-cost ratio is less than 1.0

When the present value of cost is greater than the present value of benefit

The profitability of a project or investment

The payback period of a project or investment

The link between a project's cost and benefit (correct)

The net present value of a project or investment

<p>$A = P \cdot \frac{{(1+i)^n - 1}},{{i(1+i)^n}}$</p> Signup and view all the answers

<p>The project is not economically acceptable</p> Signup and view all the answers

<p>A process to measure the benefits of a decision minus the costs</p> Signup and view all the answers

<p>To compare the costs and benefits of a decision</p> Signup and view all the answers

<p>It provides a systematic approach to decision making</p> Signup and view all the answers