If a 20 Percent Increase in the Price of a Used

question 328

Multiple Choice

If a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used cars demanded, then the price elasticity of demand equals

• A) 0.5.
• B) 1.0.
• C) 2.0.
• D) 10.0.

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Definitions:

Investment Project

An investment project represents a series of cash inflows and outflows aimed at generating a return over time, typically involving the purchase of assets or investment in ventures.

Discount Rate

In DCF evaluations, the applied rate to ascertain the contemporary value of expected future cash inflows.

Net Present Value

The difference in now-value of cash inflow versus outflow throughout a definite timeline.

Project Life

The duration from the initiation to the conclusion of a project, encompassing all phases including planning, execution, and closure.