The government authorized $10 million to build bridges on an interstate.After $8 million were spent,serious engineering flaws were discovered.At that point,experts testified that the government must authorize another $10 million in funding to make the bridges safe,bringing the project's total cost to $20 million.The government should authorize the additional funding as long as the benefits from the completed bridges exceed
A) $10 million.
B) $12 million.
C) $18 million.
D) $20 million.

Question

Quizplus · Accepted Answer

The government should authorize the additional funding only if the benefits from the completed bridges exceed the cost of $20 million. Since $8 million has already been spent, the total cost of the project will be $20 million. Therefore, the benefits must exceed $20 million - $8 million = $12 million. Therefore, the best choice is B) $12 million.

The Government Authorized $10 Million to Build Bridges on an Interstate.After