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Three of the following would raise a project's conventional benefit cost ratio. The exception is

  • A.raising the discount rate
  • B.raising the valuation of time saved
  • C.extending the project's useful life
  • D.reducing the land acquisition cost

Answer: A

Correct answer: raising the discount rate

A higher rate discounts the benefits, which mostly arrive later, more heavily than the first cost, which is incurred at once - so the ratio falls. The other three all raise it: valuing time more highly or extending the life increases the numerator, and cheaper land reduces the denominator.

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