Final answer:
The concept of 'benefits minus costs' is best described by net present value (NPV), which closely aligns with 'cash flow.' Present discounted value is a critical factor in calculating NPV, and is important in evaluating investment decisions. Option B is correct.
Step-by-step explanation:
The term for the calculation of 'benefits minus costs' is known as net present value (NPV), which is not explicitly listed in the provided options. However, based on context and the closest relevant concept, the correct answer is cash flow (option b).
Present discounted value is a key component of this concept, which is used in finance to quantify the value today of a series of future cash flows when discounted by a specific rate - often the cost of capital. Any investment decision typically involves analyzing the cash flows associated with it, where the costs of investment are subtracted from the benefits that the investment will yield over time. The result of this analysis is critical in determining whether an investment is financially viable or not.
Notably, in a business setting, when making an investment decision, a firm will assess the present value of future economic benefits against the current cost outlay, factoring in the cost of financial capital and return to society, as illustrated in the examples provided related to environmental policies and capital investments.