Refer to the Information Provided in Table 24

question 346

Multiple Choice

Refer to the information provided in Table 24.7 below to answer the question(s) that follow.
Table 24.7
All Numbers are in $ Million
-Refer to Table 24.7. Suppose the economy is in equilibrium and the government increases spending by $100 million, the new equilibrium output is $________ million

• A) 1,600
• B) 1,800
• C) 1,900
• D) 2,400

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Definitions:

Incremental Value

The additional value generated from a particular decision, investment, or action over its alternative.

Acquiring Firm

A company that purchases or takes control of another company through a merger, acquisition, or takeover.

Target Firm

A company that is the subject of a takeover attempt or an acquisition by another company.

NPV

A method used in capital budgeting to assess the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.