Better Business Cases Foundation Practice Test 2025 – The All-In-One Guide to Exam Success!

The inclusion of all quantifiable welfare costs and benefits to society in the economic appraisal is essential because economic appraisal aims to provide a comprehensive evaluation of a project's overall impact. This encompasses not just the financial aspects, such as costs and revenues, but also how the project affects various stakeholders and societal welfare as a whole. By incorporating welfare costs and benefits, the appraisal presents a broader perspective on the project's value, helping decision-makers assess whether the project's outcomes justify the resources invested.

Considering the other options, current nominal prices focus solely on prices without adjusting for inflation or changes in real value, which may not reflect the true economic environment. Inflation adjustments are important for accounting over time but do not capture the entirety of social impacts. Similarly, cash-based accounting measures only provide a financial snapshot without including the societal outcomes that the project could generate. The emphasis on comprehensive welfare costs and benefits is what sets economic appraisal apart from more narrow assessments.