Which of the following statements are not true? i. Benefit- cost ratio is equal to the ratio of present…
Statements ii, iii and iv are not true. The benefit-cost ratio divides the present value of benefits by the present value of costs, so adding benefits and costs or mixing…
Choose your answer
Which of the following statements are not true?
i. Benefit- cost ratio is equal to the ratio of present value of benefits to present value of costs
ii. Benefit- cost ratio is equal to the sum of present value of benefits and present value of costs
iii. Benefit- cost ratio is equal to the ratio of present value of benefits to future value of costs
iv. Benefit- cost ratio is equal to the sum of present value of benefits and future value of costs
Answer and explanation
Correct answer B
Statements ii, iii and iv are not true. The benefit-cost ratio divides the present value of benefits by the present value of costs, so adding benefits and costs or mixing present benefits with future costs does not give that ratio.
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Telangana SET (TG SET)