Multiple Choice Questions
1. All of the following are examples of public sector projects, except:
(a) Bridges
(b) Emergency relief
(c) Prisons
(d) Oil wells
2. All of the following are usually associated with public sector projects except:
(a) Funding from taxes
(b) Profit
(c) Disbenefits
(d) Infinite life
3. All of the following would be examples of public projects except:
(a) Air traffic control system
(b) Establishing a dot.com company
(c) Dam with irrigation canals
(d) Mass transit system
4. In a conventional B/C ratio, revenue received by the government from admission to national parks should be:
(a) Added to benefits in the numerator
(b) Subtracted from benefits in the numerator
(c) Subtracted from costs in the denominator
(d) Added to costs in the denominator
5. In a conventional B/C ratio:
(a) Disbenefits and M&O costs are subtracted from benefits.
(b) Disbenefits are subtracted from benefits and M&O costs are included in costs.
(c) Disbenefits and M&O costs are added to costs.
(d) Disbenefits are added to costs and M&O costs are subtracted from benefits.
6. In a modified B/C ratio:
(a) Disbenefits are put in the denominator.
(b) Benefits are subtracted from costs.
(c) M&O costs are put in the denominator.
(d) M&O costs are put in the numerator.
7. If two mutually exclusive alternatives have B/C ratios of 1.4 and 1.5 for the lower- and higher-cost alternatives, respectively, the following is correct:
(a) The B/C ratio on the increment between them is equal to 1.5.
(b) The B/C ratio on the increment between them is between 1.4 and 1.5.
(c) The B/C ratio on the increment between them is less than 1.5.
(d) The higher-cost alternative is the better one economically.
8. In evaluating three independent alternatives by the B/C method, the alternatives were ranked A, B, and C, respectively, in terms of increasing cost and the following results were obtained for overall B/C ratios: 1.1, 0.9, and 1.3. On the basis of these results, you should:
(a) Select only alternative A
(b) Select only alternative C
(c) Compare A and C incrementally
(d) Select alternatives A and C