You’ve been asked to perform a benefit/cost analysis for two proposed projects

posted 2¼years ago by Natalie2000
© Copyright: Project Management Professional (PMP) Study Guide by Kim Heldman, Sybex Inc., Alameda, CA, USA, 2002, page 29
Cost Management | Cost/Benefit Analysis

You are a project manager for Waterways Houseboats, Inc. You’ve been asked to perform a benefit/cost analysis for two proposed projects. Project A costs $2.4 million with potential benefits of $12 million and future operating costs of $3 million. Project B costs $2.8 million with potential benefits of $14 million and future operating costs of $2 million. Which project should you recommend?

A. Project A because the cost to implement is cheaper than Project B
B. Project A because the potential benefits plus the future operating costs are less in value than the same calculation for Project B
C. Project B because the potential benefits minus the implementation and future operating costs are greater in value than the same calculation for Project A
D. Project B because the potential benefits minus the costs to implement are greater in value than the same calculation for Project A