If the Value of Beach-Front Property in Beach City Decreases,the

question 81

Multiple Choice

If the value of beach-front property in Beach City decreases,the people of Beach City will likely spend _____,causing incomes in Beach City to _____.

• A)more;increase
• B)more;decrease
• C)less;increase
• D)less;decrease

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Definitions:

Cash Payback Period

The time period required for the returns from an investment to repay the initial capital outlay.

Annual Net Cash Flows

This term refers to the amount of money that flows in and out of a business over a year after all expenses have been accounted for.

Expected Total Cash Flows

An estimation of all cash inflows and outflows associated with an investment over its expected life, used to gauge its profitability.

Average Rate of Return

A financial ratio indicating the average annual return earned through an investment over its lifetime, expressed as a percentage of the initial investment cost.