Decision Making Techniques

1. What does the Benefit-Cost Ratio (BCR) represent in project evaluation?

• 1. The internal rate of return

• The net present value of a project

• The ratio of total benefits to total costs

If a project has a BCR of 1.5, what does it imply?

• 1. The project has a negative net present value

• The project returns 1.5 units of benefit per unit cost

• 1. The project breaks even
     

In Decision Tree Analysis, the alternative that has ______ payoff will be selected.

• lowest

• highest

• negative

The Contribution Margin can be increased by ________

• Increasing selling price per unit

• Decreasing variable cost per unit

• Increasing sales quantity

• All of these

If the Decision Tree analysis is solely based on the costs, the alternative with ______ total or initial cost will be selected.

• lowest

• highest