Waec Model Questions Vol1 2022 Government Question 8

Practice objective / multiple choice question 8 from the 2022 Waec Model Questions Vol1 Government examination.

Waec Model Questions Vol1 2022 Government Objective / Multiple Choice Hard Difficulty
Question 8 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • GOVERNMENT • objective

A local government unit plans a three‑year waste‑management programme. The projected annual costs are: Year 1 = ₦12 000 000; Year 2 = 8 % higher than Year 1; Year 3 = 5 % higher than Year 2. The expected annual benefits (reduced health costs) are: Year 1 = ₦9 000 000; Year 2 = 1.2 times Year 1; Year 3 = 1.1 times Year 2. The unit discounts cash flows at 10 % per annum. After discounting, a grant will cover 25 % of the total discounted cost, but the grant is awarded only if the net present value (NPV) is positive after the grant is applied. Should the programme be undertaken?

Answer Options

Correct Answer A. Yes, because the NPV after the grant is positive (≈ ₦2.15 million).
B. No, because the NPV after the grant is negative (≈ -₦0.45 million).
C. No, because the NPV after the grant is negative (≈ -₦0.10 million).
D. No, because the NPV after the grant is negative (≈ -₦1.20 million).
Correct Answer
A
Correct Option:
Yes, because the NPV after the grant is positive (≈ ₦2.15 million).

About This Question

This is Waec Model Questions Vol1 2022 Government Question 8. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Government examination.

Difficulty level: Hard .

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