Question

Use the theee criberia presented below to acsess the wiablity of the tollowing public sector Program B Activity Year Recrigts (S1,000 Acviy Year Receipts 51,000 3000 The spending scheules for both progd be Activity Yer 1-Total Cost for Progam A-$.00 (There ane no other costs for ote tity yras

Answer 1

Receipts of A Receipts of B Receipts of A Receipts of B Years Years Receipts of A Receipts of B Years -4200 1000 -4200 0 1000 1000 1000 2000 0 1000 4 1000 800 1500 1500 1500 1500 1000 1000 1000 Cost benefit ratio Net Cash Flow Net -0.72 receipts 5,800 4,500 conclusion: Both the programs are not viable conclusion: Project A is viable with higher value conclusion: Project A is viable with higher value according to Benefit cost ratio as these are less than 1