4. The government has undertaken a highway project that was originally projected to cost $1 billion and provide benefits of $1.5 billion. Unfortunately, the costs have been much higher than anticipated. The government has spent $1.2 billion so far and now expects it will cost an additional $1.2 billion to finish the project. Should the project be abandoned or completed?

Question

Business

Denise

3 December, 00:37

4. The government has undertaken a highway project that was originally projected to cost $1 billion and provide benefits of $1.5 billion. Unfortunately, the costs have been much higher than anticipated. The government has spent $1.2 billion so far and now expects it will cost an additional $1.2 billion to finish the project. Should the project be abandoned or completed?

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Answers (1)

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Lilliana Bright · Answer 1

Abandon the project.

Explanation:

Abandoning the project is viable option because as there is no profit, so $1.2 billion of government will be at loss.