When evaluating the viability of a project, the test of economic efficiency requires that:
A) NPV and BCR are greater than or equal to 0.
B) NPV is greater than or equal to 0 and BCR is greater than or equal to 1.
C) NPV is greater than or equal to 1 and BCR is greater than or equal to 0.
D) NPV and BCR are greater than or equal to 1.

Question

Quizplus · Accepted Answer

The test of economic efficiency requires that NPV is greater than or equal to 0, which ensures that the project generates a positive cash flow, and BCR is greater than or equal to 1, which ensures that the benefits of the project outweigh the costs. Therefore, only choice B meets both criteria.

When Evaluating the Viability of a Project, the Test of Economic