Neco 2018 Government Question 5

Practice objective / multiple choice question 5 from the 2018 Neco Government examination.

Neco 2018 Government Objective / Multiple Choice Hard Difficulty
Question 5 NECO • 2018 • GOVERNMENT • objective

A ministry proposes a project that costs \(\text{₦}120\) million. The project is expected to generate an annual benefit of \(\text{₦}30\) million for six years. Using a discount rate of 10 % per annum, (a) calculate the net present value (NPV) of the project, and (b) compute the benefit‑cost ratio (BCR). The project will be approved only if the NPV is positive **and** the BCR is at least 1.2. Does the project satisfy both criteria?

Answer Options

A. NPV = ₦12.30 million (positive); BCR = 1.25; the project meets both criteria, so it is approved.
B. NPV = ₦-5.20 million (negative); BCR = 0.95; the project fails both criteria, so it is not approved.
Correct Answer C. NPV = ₦10.65 million (positive); BCR = 1.09; the project fails the BCR requirement, so it is not approved.
D. NPV = ₦8.00 million (positive); BCR = 1.15; the project meets NPV but not BCR, so it is not approved.
Correct Answer
C
Correct Option:
NPV = ₦10.65 million (positive); BCR = 1.09; the project fails the BCR requirement, so it is not approved.

About This Question

This is Neco 2018 Government Question 5. It is one of the objective questions from the 2018 Neco Government examination.

Difficulty level: Hard .

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