Project Lifecycle, Needs Assessment and Feasibility

Introduction

Infrastructure projects convert public or private needs into physical and service outcomes such as roads, bridges, water-treatment plants, railways, schools, hospitals, energy systems and digital networks. Because these projects consume substantial resources, affect communities for decades and involve many organizations, their success depends on decisions made long before construction begins. A technically sound design can still fail if the need was misunderstood, the wrong option was selected, the benefits were overstated or social and environmental impacts were ignored.

Project lifecycle management provides a structured route from the recognition of a problem to project closure and post-completion evaluation. Needs assessment establishes what problem exists, who experiences it and what level of service is required. Feasibility analysis tests whether alternative responses are technically practicable, economically justified, environmentally acceptable, socially legitimate and institutionally deliverable. The business case then assembles the evidence needed for an investment decision, while the project charter authorizes the selected project and establishes its initial direction.

This chapter treats these activities as connected decision processes rather than isolated reports. The objective is not simply to produce documentation, but to improve the quality, transparency and defensibility of infrastructure investment decisions.

Learning Objectives

By the end of this chapter, students should be able to:

1. Explain the stages and decision gates of an infrastructure project lifecycle.
2. Conduct a structured needs assessment using baseline, demand and service-level evidence.
3. Generate and screen alternative solutions, including non-asset and phased options.
4. Distinguish technical, economic, financial, environmental, social and institutional feasibility.
5. Apply basic discounted-cash-flow measures to a preliminary business case.
6. Identify uncertainty, risk, optimism bias and distributional effects in feasibility analysis.
7. Prepare the essential components of a project charter.
8. Explain how governance, ethics, regulation and digital tools influence early project decisions.

1. The Infrastructure Project Lifecycle

A lifecycle is the sequence of phases through which a project passes. It is a management model, not a claim that every project follows exactly the same linear path. Infrastructure projects commonly use the following phases:

The phases overlap. Surveys may begin during identification; procurement strategy can affect feasibility; and operating requirements should influence design. Nevertheless, phase separation creates decision points at which sponsors can stop, redirect or authorize further expenditure.

Decision gates

A decision gate is a formal review at which evidence is examined against predetermined criteria. Typical gates ask:

• Is the problem sufficiently important and supported by evidence?
• Is there a clear strategic and legal mandate?
• Have credible alternatives been considered?
• Is the preferred option affordable and deliverable?
• Are risks, impacts and uncertainties acceptable?
• Is the project ready for the next phase?

A gate is not merely an administrative approval. It is a control against premature commitment. Expenditure should normally increase only as uncertainty is reduced. If a project cannot demonstrate a need, it should not proceed to detailed design merely because preliminary work has already been performed. This principle is known as avoiding escalation of commitment or sunk-cost bias.

Predictive, iterative and hybrid lifecycles

A predictive lifecycle defines much of the scope before execution. It is suitable where requirements are stable, regulatory approvals are sequential and physical interfaces make late change expensive. A road or treatment plant often requires substantial predictive planning.

An iterative lifecycle develops the solution through repeated cycles of investigation, testing and refinement. It is useful where requirements are uncertain or innovation is important. Digital infrastructure and some smart-city services may benefit from iterative development.

A hybrid lifecycle combines the two. For example, the alignment and structural requirements of a bridge may be managed predictively while its intelligent monitoring platform is developed iteratively. The appropriate model depends on uncertainty, safety consequences, procurement rules, stakeholder needs and the cost of change.

2. Needs Assessment

From demand to a justified need

A need is not identical to a request for a particular asset. A transport agency may request a new highway, but the underlying need could be reduced travel time, improved safety, reliable access to employment or increased freight capacity. Starting with the requested solution creates a risk of defining the problem too narrowly.

A robust needs assessment answers five questions:

1. What condition or service deficiency exists?
2. Who is affected, where and to what degree?
3. What evidence demonstrates the deficiency?
4. What will happen if no intervention is made?
5. What level of service is required in the future?

The assessment should establish a baseline. A baseline may include current demand, capacity, reliability, condition, safety performance, operating cost, environmental quality and user experience. Data sources can include asset registers, surveys, traffic counts, utility records, demographic statistics, maintenance histories, incident reports and stakeholder interviews.

Problem definition and theory of change

A useful problem statement identifies cause, condition and consequence. For example:

Peak-period bus overcrowding on the eastern corridor results from insufficient service frequency and poor interchange design, causing excessive waiting, unreliable journey times and reduced access to employment.

This statement is stronger than “the city needs a bus terminal” because it does not prejudge the solution.

A theory of change links intervention to results:

Inputs → Activities → Outputs → Outcomes → Benefits

For example, funding and technical staff enable improved scheduling and interchange works; these produce increased service capacity and safer transfers; the outcomes are shorter waits and more reliable journeys; the benefits are improved accessibility and productivity. The theory of change helps distinguish outputs, which the project directly delivers, from benefits, which depend partly on user behavior and the operating environment.

Demand forecasting

Demand forecasts should be transparent about their data, time horizon and assumptions. Important drivers may include population, income, land use, vehicle ownership, industrial production, climate, tariffs and policy. Forecasts should use scenarios rather than a single supposedly precise value.

A simple trend model may be written as:

where D_t is demand in period t, D₀ is base-period demand, g is the constant growth rate per period, and t is the number of periods. This model assumes a constant compounded growth rate and is suitable only for preliminary analysis when structural changes are limited. It should not replace a causal forecast where demand is affected by prices, capacity, land use or policy.

If current demand is 20,000 trips per day and annual growth is assumed to be 3% for five years, then:

The result is a planning estimate, not a guaranteed outcome. Sensitivity testing might examine growth rates of 1%, 3% and 5%.

Capacity and service gaps

A service gap is the difference between required service and available service. It should be measured in terms meaningful to users, such as hours of water supply, road reliability, classroom places, treatment capacity or emergency response time. A physical capacity surplus does not necessarily mean that no need exists: poor location, unreliable operation or unequal access may still create a service deficit.

Needs assessment should also consider the “do-minimum” or “do-nothing” case. In practice, doing nothing may involve routine maintenance, demand management or regulatory action. It is a comparator against which other options are assessed, not necessarily a literal absence of all activity.

3. Options Development and Screening

Generating alternatives

Options should be generated before a preferred solution is selected. Categories include:

• Do-minimum: maintain existing services and manage demand.
• Operational: improve scheduling, maintenance, pricing or procedures.
• Demand-management: encourage modal shift, conservation or off-peak use.
• Rehabilitation: restore or upgrade existing infrastructure.
• Expansion: increase capacity of the current system.
• New-build: construct a new asset or network.
• Digital or distributed: use sensors, information systems, local systems or modular facilities.
• Phased or adaptive: invest progressively as demand and evidence develop.

Options should be technically distinct and capable of addressing the stated need. “Build a larger version” is not a complete options analysis if operational or rehabilitation solutions could meet the same service requirement.

Screening criteria

An initial long list can be screened using mandatory and weighted criteria. Mandatory criteria may include legal compliance, land availability, safety and minimum service performance. Weighted criteria may include capital cost, operating cost, delivery time, resilience, carbon emissions, social inclusion and expansion potential.

A simple weighted score is:

where S_j is the score for option j, w_i is the weight assigned to criterion i, and r_ij is the rating of option j against criterion i. Weights should sum to 1 if ratings use a normalized scale. Weighted scoring supports structured comparison, but it does not eliminate judgment. A high score cannot override a mandatory legal or safety failure.

4. Feasibility Dimensions

Feasibility is multidimensional. A project is not feasible merely because engineers can build it.

Technical feasibility

Technical analysis considers site conditions, materials, constructability, technology maturity, utilities, interfaces, operations, maintenance, resilience and safety. Typical investigations include geotechnical surveys, hydrology, condition assessment, utility mapping, constructability reviews and preliminary design.

Questions include:

• Can the required performance be achieved with available technology?
• Are materials, equipment and specialist skills available?
• Can the asset be constructed safely within site constraints?
• Can it be operated and maintained by the responsible organization?
• Will it tolerate hazards such as flooding, seismic activity, heat or cyber disruption?

Technical feasibility should distinguish proven systems from experimental systems. A technically possible design may still be unsuitable if it depends on unavailable maintenance skills or unreliable energy and spare-parts supply.

Economic and financial feasibility

Economic appraisal examines changes in social welfare, including costs and benefits to users, government, producers and affected communities. Financial appraisal examines the cash flows of the project or implementing organization. A project may be economically beneficial but financially unable to repay debt; conversely, a financially profitable toll facility may impose significant external costs on communities.

For discounted cash flow, present value is:

where PV_t is the present value of a cash flow X_t received or paid in period t, r is the discount rate per period, and t is measured using the same period as the rate. The formula assumes cash flows occur at the end of each period and that the discount rate is appropriate for the appraisal perspective.

Net present value is:

where I₀ is initial investment, B_t is benefit in period t, C_t is cost in period t, SV_n is residual or salvage value at the end of period n, r is the discount rate and n is the appraisal life. All monetary amounts must use consistent prices, currency and treatment of taxes. A positive NPV indicates that discounted benefits exceed discounted costs under the selected assumptions; it does not prove affordability or absence of risk.

The benefit–cost ratio is commonly expressed as:

A BCR above 1 indicates that present-value benefits exceed present-value costs. NPV is generally preferable when comparing mutually exclusive projects because BCR can favor a smaller project with a higher ratio but lower absolute value.

Worked example. Suppose a small access improvement requires an initial investment of $1.00 million. It produces benefits of $0.45 million in each of three years, with operating costs of $0.10 million per year. Assume a discount rate of 8% and no residual value.

The net annual benefit is $0.35 million. Therefore:

The present value of benefits net of operating costs is approximately $0.902 million, so NPV is approximately −$0.098 million. On these assumptions the option does not meet an NPV criterion of zero or greater. A decision-maker should not immediately reject it: benefits may have been omitted, the discount rate may require review, or a lower-cost design may be available. These issues should be investigated transparently rather than adjusted merely to obtain approval.

Environmental feasibility

Environmental analysis identifies impacts during construction, operation, maintenance and decommissioning. It may address biodiversity, water, air quality, noise, waste, carbon emissions, land disturbance, cultural heritage and climate resilience. Environmental impact assessment requirements differ by jurisdiction, but good practice generally includes screening, scoping, baseline studies, impact prediction, mitigation, monitoring and public disclosure.

The mitigation hierarchy is:

1. Avoid the impact where possible.
2. Minimize unavoidable impacts.
3. Restore affected environments.
4. Offset residual impacts only where permitted and credible.

Environmental feasibility is not a final-stage permit exercise. A route, site or technology selected early can determine impacts that cannot later be mitigated economically.

Social feasibility and stakeholder legitimacy

Social feasibility concerns whether affected people consider the project acceptable, fair and responsive. It includes land acquisition, displacement, livelihood effects, accessibility, gender and disability inclusion, worker welfare, community health and safety, cultural heritage and distribution of benefits and burdens.

Stakeholder analysis should identify interests, influence, vulnerability and likely impact. Consultation is meaningful when it occurs early, provides accessible information, allows alternatives to be discussed and records how feedback affected decisions. Consultation is not the same as obtaining unanimous agreement; however, unresolved opposition, misinformation or unequal participation can create serious delivery risk.

Institutional, legal and procurement feasibility

Institutional analysis examines whether the sponsor has the authority, capability, staffing, funding and accountability to deliver and operate the asset. Legal analysis may cover planning approval, environmental regulation, land rights, procurement law, labor law, safety regulation, tariffs, data protection and public finance rules.

Procurement feasibility considers packaging, market capacity, contract form, risk allocation and the client’s ability to manage the selected arrangement. Transferring a risk to a contractor does not make the risk disappear. A risk should be allocated to the party best able to control or absorb it, and the contract should provide realistic mechanisms for pricing, change and dispute resolution.

5. Risk, Uncertainty and Resilience

Risk is the effect of uncertainty on objectives. A risk register commonly records the cause, event, consequence, probability, impact, owner, response and status. Qualitative matrices are useful for prioritization but can create false precision if scores are treated as measured probabilities.

Quantitative analysis can use expected monetary value:

where p_k is the probability of outcome k and I_k is its monetary impact, with costs normally represented as negative values. EMV is useful for portfolios of repeated or reasonably characterized risks; it is not a prediction of the exact result of one unique project.

Sensitivity analysis changes one assumption at a time to identify influential variables. Scenario analysis changes several related assumptions, such as low, central and high demand. Monte Carlo simulation can represent probability distributions for uncertain variables, but its outputs are only as credible as the input distributions and correlations.

Infrastructure decisions should address optimism bias—the tendency to underestimate cost and time or overestimate benefits. Historical reference classes, independent review, contingency allowances and explicit uncertainty ranges can reduce this bias. Resilience analysis asks whether the system can maintain or rapidly restore essential service after shocks. Adaptable designs, redundancy, maintainability and staged investment may produce greater long-term value than designs optimized only for an expected condition.

6. The Business Case

A business case is an evidence-based argument for investment. It should make the decision logic visible rather than advocate a predetermined project. A useful structure includes:

1. Strategic case: alignment with policy, plans, service obligations and organizational objectives.
2. Economic case: comparison of options and their costs, benefits, impacts and risks.
3. Commercial case: procurement route, market capability, contract and risk allocation.
4. Financial case: affordability, funding, cash flow, revenue and operating implications.
5. Management case: governance, schedule, resources, assurance, benefits realization and change control.

The preferred option should be selected through explicit criteria. The case should state assumptions, exclusions, price basis, discount rate, appraisal period, tax treatment, residual value, dependencies and sensitivity results. It should also explain who receives benefits and who bears costs. Distributional analysis is especially important where a project improves regional productivity but displaces low-income households or increases local environmental burdens.

7. The Project Charter

The project charter is the formal document that authorizes a project and gives the project manager authority to use organizational resources within defined limits. It is not a substitute for a feasibility study, and it should not conceal unresolved investment questions.

Core charter elements include:

• project title, sponsor and responsible organization;
• background, problem and strategic justification;
• objectives expressed in measurable terms;
• high-level scope and explicit exclusions;
• major deliverables and acceptance conditions;
• key stakeholders and governance arrangements;
• preliminary schedule and milestones;
• indicative budget and funding source;
• assumptions, constraints, dependencies and major risks;
• reporting, assurance and decision rights;
• success measures and benefits ownership;
• authorization signatures and version control.

Objectives should be specific enough to guide decisions. “Improve mobility” is weak; “reduce average peak-period journey time on the eastern corridor by 15% within two years of opening, while maintaining safe access for pedestrians” is more useful, provided the baseline and measurement method are defined.

A charter should remain proportionate. Early estimates are not promises of precision. As design and investigation progress, the charter may be refined through controlled change, but fundamental changes in need, scope, budget or benefits should return to the appropriate governance gate.

8. Applied Case: Riverside Flood-Protection and Access Programme

The following is an illustrative case based on common infrastructure-management conditions.

Background and problem

Riverside is a growing municipality located beside a river. A low embankment and two undersized drainage outlets protect a residential district, a market and an industrial access road. Flooding has occurred four times in eight years. The municipality initially proposed a large concrete floodwall.

Needs assessment

The assessment found that the problem was not only insufficient wall height. Blocked drains, settlement of the embankment, development in the floodplain and limited emergency access increased exposure. Approximately 8,000 residents and 140 businesses were affected by a one-in-50-year flood under current conditions. Climate projections indicated increased peak rainfall, but the range of projections was substantial.

The team established a baseline covering flood depth, warning time, property exposure, road closure duration, drainage condition and vulnerable populations. The do-minimum case included drainage maintenance, enforcement of floodplain controls and emergency planning.

Options analysis

Four options were shortlisted:

• improved maintenance and warning systems;
• embankment rehabilitation with enlarged drainage outlets;
• a continuous floodwall and pumping station;
• a combination of partial protection, upstream storage, drainage improvements and property-level resilience measures.

Technical analysis found that the floodwall offered a high nominal protection level but created a residual risk if pumps failed and reduced public access to the river. The combined option had lower initial cost, could be expanded as evidence improved and distributed risk across several measures. It required stronger coordination among the municipality, landowners and emergency services.

Economic appraisal included avoided damage, reduced road closures, health and safety effects, construction cost, maintenance and residual flood risk. Environmental analysis considered river habitat and sediment movement. Social analysis identified renters, informal traders and households with limited capacity to finance property-level measures.

Approach and governance

The municipality selected a phased programme subject to a detailed design gate. Phase 1 funded drainage rehabilitation, monitoring, emergency access and high-priority embankment repairs. Phase 2 would add storage and localized barriers if monitored water levels and development trends justified them. A community advisory group reviewed access, market operations and relocation concerns.

The charter assigned the municipality as sponsor, the drainage department as asset owner and an independent technical panel as assurance body. Benefits included reduced flood damage, shorter road closures and protection of essential access, with indicators and measurement dates specified.

Outcome and learning points

The case demonstrates that a visible asset request may conceal a broader service problem. It also shows the value of the do-minimum case, phased investment, monitoring and adaptive design. The preferred option was not the one with the largest structure; it was the one that best balanced risk reduction, affordability, environmental effects, social legitimacy and institutional capacity.

9. Governance, Ethics and Contemporary Practice

Early project decisions involve ethical responsibilities. Analysts must disclose conflicts of interest, distinguish evidence from advocacy, avoid manipulating assumptions and report adverse impacts honestly. Public participation should not be tokenistic, and vulnerable groups should not bear disproportionate burdens without mitigation and remedy. Procurement decisions require fairness, confidentiality and avoidance of collusion.

Regulatory compliance establishes a minimum standard; professional responsibility may require stronger action where legal requirements are incomplete. Safety, human rights, accessibility and intergenerational equity should be considered alongside cost and schedule.

Building information modelling can connect requirements, spatial information, cost planning and asset-management data. Geographic information systems support site, catchment and network analysis. Sensors and digital twins can improve baseline measurement and benefits verification, but data quality, cybersecurity, privacy, interoperability and ownership must be managed. Artificial intelligence may assist demand forecasting, document review or risk pattern detection, yet human review remains necessary because training data may be biased and predictions may not explain unusual local conditions. AI-generated assumptions must never be treated as verified evidence without checking.

10. Common Failure Modes and Best Practices

Frequent failures include defining the solution before the problem, relying on a single forecast, omitting the do-minimum case, underestimating operating costs, ignoring land and utility constraints, treating consultation as a public-relations exercise and approving projects before governance capacity is tested. Another failure is confusing a high benefit–cost ratio with affordability or assuming that a contract transfers all risks away from the sponsor.

Best practice is to:

• define outcomes before assets;
• use multiple evidence sources and document data limitations;
• compare credible alternatives, including staged and non-asset solutions;
• integrate technical, economic, environmental, social and institutional analysis;
• test assumptions through sensitivity and scenario analysis;
• use independent assurance at decision gates;
• identify who benefits and who bears impacts;
• plan operations, maintenance and decommissioning early;
• create measurable benefits and assign benefits owners;
• update the business case as evidence changes; and
• preserve an auditable record of assumptions, decisions and dissenting views.

Chapter Summary

The infrastructure project lifecycle moves from problem identification and needs assessment through options development, feasibility, authorization, delivery, operation and closure. Lifecycle models may be predictive, iterative or hybrid, and decision gates control commitment as uncertainty is reduced.

Needs assessment establishes the service gap, affected groups, baseline conditions, future demand and do-minimum case. Options should address the underlying need and may include operational, rehabilitation, digital, demand-management, new-build and phased solutions. Feasibility is multidimensional: technical, economic, financial, environmental, social, institutional, legal and commercial considerations interact.

Discounted cash flow supports economic and financial appraisal, but results depend on assumptions, perspective, price basis, discount rate and treatment of risk. Business cases organize evidence through strategic, economic, commercial, financial and management cases. Project charters authorize execution by defining objectives, scope, governance, resources, risks and success measures. Ethical practice requires transparent assumptions, meaningful participation, fair impact distribution and responsible use of technology. Strong early analysis does not guarantee project success, but weak early analysis makes failure more likely and more expensive.

Key Terms

Business case: Evidence-based justification for investing in a project.

Capacity: The maximum service or throughput an infrastructure system can provide under defined conditions.

Decision gate: Formal review point at which continuation, modification or termination is considered.

Demand forecast: Estimate of future use or requirement for a service.

Do-minimum case: The realistic baseline option involving continued operation, maintenance or limited intervention.

Economic appraisal: Assessment of costs and benefits to society as a whole.

Feasibility: The extent to which a proposed intervention can be delivered and operated successfully.

Financial appraisal: Assessment of cash flows and affordability from the perspective of an organization or funder.

Lifecycle: Sequence of phases through which a project and asset progress.

Net present value: Discounted value of benefits minus discounted costs, including initial investment and residual value where applicable.

Needs assessment: Structured investigation of service deficiencies, affected users, causes and future requirements.

Options appraisal: Comparative evaluation of alternative responses to a defined need.

Optimism bias: Systematic tendency to underestimate costs and risks or overestimate benefits and speed.

Project charter: Document that formally authorizes a project and establishes its initial direction.

Residual risk: Risk remaining after mitigation or controls are applied.

Service gap: Difference between required and available service performance or capacity.

Stakeholder: Person, group or organization that can affect, be affected by or perceive itself affected by a project.

Theory of change: Logical explanation linking inputs and activities to outputs, outcomes and benefits.

Weighted scoring: Decision technique that combines criterion ratings using assigned weights.

Review Questions

Short Answer Questions

1. What is the purpose of a decision gate in an infrastructure project lifecycle?
2. Why should needs assessment begin with a problem rather than a proposed asset?
3. Distinguish economic appraisal from financial appraisal.
4. What are the five cases commonly included in a business case?
5. Identify four essential elements of a project charter.

Long Answer Questions

1. Explain the phases of an infrastructure project lifecycle and discuss why phases may overlap.
2. Describe a systematic method for carrying out a needs assessment, including baseline, demand forecast and do-minimum analysis.
3. Compare predictive, iterative and hybrid lifecycle models and identify circumstances in which each may be appropriate.
4. Explain how technical, environmental, social and institutional feasibility interact in infrastructure decision-making.
5. Discuss how optimism bias, uncertainty and resilience should be addressed in a business case.

Analytical / Application Questions

1. A municipality proposes a new four-lane road because congestion is increasing. Develop a needs-assessment framework that tests whether road construction is the correct response. Identify at least four alternative interventions.
2. An option costs $2.5 million initially and produces net benefits of $1.0 million per year for three years. Using an 8% discount rate and no residual value, calculate its approximate NPV and explain two limitations of relying on this result alone.
3. Prepare a high-level project charter for a flood-protection, water-supply or public-transport project of your choice. State its problem, objectives, scope, stakeholders, risks, governance and measurable success indicators.

Multiple Choice Questions with Answers

Question 1

Which statement best describes a project decision gate?

A. A routine construction inspection performed every day

B. A formal review used to decide whether a project should proceed, change or stop

C. A procurement document that transfers every project risk to a contractor

D. The final invoice submitted after project completion

Correct Answer: B. A formal review used to decide whether a project should proceed, change or stop

Question 2

Why is a do-minimum case important in feasibility analysis?

A. It guarantees that no maintenance will be performed

B. It provides a realistic baseline against which intervention options can be compared

C. It is always the cheapest option in present-value terms

D. It replaces the need for demand forecasting

Correct Answer: B. It provides a realistic baseline against which intervention options can be compared

Question 3

If base demand is 10,000 units, annual growth is 5% and the period is two years, what is demand under the compounded trend model?

A. 10,500 units

B. 11,000 units

C. 11,025 units

D. 12,500 units

Correct Answer: C. 11,025 units

Question 4

Which appraisal primarily examines costs and benefits to society as a whole?

A. Economic appraisal

B. Financial appraisal

C. Contract administration

D. Quality assurance

Correct Answer: A. Economic appraisal

Question 5

In the formula NPV = -I₀ + ∑(B_t - C_t)/(1+r)^t, what does r represent?

A. Residual value

B. Discount rate per period

C. Initial investment

D. Physical risk rating

Correct Answer: B. Discount rate per period

Question 6

Which item belongs primarily to the strategic case of a business case?

A. The proposed contract payment schedule

B. The project’s alignment with policy and organizational objectives

C. The contractor’s daily equipment log

D. The final defects list

Correct Answer: B. The project’s alignment with policy and organizational objectives

Question 7

What is the main purpose of a project charter?

A. To replace all detailed design drawings

B. To authorize the project and define its initial direction and governance

C. To certify that construction is complete

D. To calculate the exact final project cost

Correct Answer: B. To authorize the project and define its initial direction and governance

Question 8

Which action follows the mitigation hierarchy most directly?

A. Offset every impact before attempting to avoid it

B. Avoid environmental impact where possible before minimizing or offsetting residual effects

C. Ignore impacts that occur outside the construction site

D. Treat environmental approval as unnecessary if the NPV is positive

Correct Answer: B. Avoid environmental impact where possible before minimizing or offsetting residual effects

Question 9

A project has present-value benefits of $12 million and present-value costs of $10 million. What is its benefit–cost ratio?

A. 0.83

B. 1.20

C. 2.00

D. 22.00

Correct Answer: B. 1.20

Question 10

Which statement about weighted scoring is most accurate?

A. It eliminates judgment from project selection

B. It can override a mandatory legal or safety failure

C. It supports structured comparison but depends on defensible weights and ratings

D. It is identical to net present value

Correct Answer: C. It supports structured comparison but depends on defensible weights and ratings