If you have $1,800 in benefits and $1,450 in costs, the benefit/cost ratio is approximately

If you have $1,800 in benefits and $1,450 in costs, the benefit/cost ratio is approximately

• A. 1.00 to 1
• B. 1.24 to 1
• C. 0.75 to 1
• D. 2.00 to 1

Answer: (B)

This question tests how to compute and interpret a benefit-to-cost ratio. You divide total benefits by total costs. Here, 1800 divided by 1450 equals about 1.241, which rounds to 1.24. So the ratio is approximately 1.24 to 1. For every dollar of cost, you get roughly $1.24 in benefits. Since the ratio is greater than 1, benefits exceed costs, indicating a positive return. The net benefit is 1800 − 1450 = 350, which is about 24% of the costs (350/1450 ≈ 0.241).

This question tests how to compute and interpret a benefit-to-cost ratio. You divide total benefits by total costs. Here, 1800 divided by 1450 equals about 1.241, which rounds to 1.24. So the ratio is approximately 1.24 to 1. For every dollar of cost, you get roughly $1.24 in benefits. Since the ratio is greater than 1, benefits exceed costs, indicating a positive return. The net benefit is 1800 − 1450 = 350, which is about 24% of the costs (350/1450 ≈ 0.241).