Question

When using the benefi t-cost ratio measure of worth, what benchmark is the calculated ratio compared to in determining if an individual investment is attractive?

Answer 1

Answer:

1.0

Explanation:

Benefit-cost ratio BCR can be expressed in monetary or qualitative terms. It presents the relationship between the relative costs and benefits of a proposed project.

If a project has a BCR greater than 1.0, the project is expected to be attractiveto a firm and its investors.

If a project's BCR is less than 1.0, the project's costs outweigh the benefits, and it should not be considered because it is unattractive.