A Normal Good Will Have an Income Elasticity That Is

question 125

Multiple Choice

A normal good will have an income elasticity that is

• A) negative.
• B) positive.
• C) zero.
• D) less than 1.
• E) greater than 1.

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Definitions:

Cash Inflows

Cash Inflows are the money or cash received by a business from its various activities, including sales, investments, financing, etc.

Profitability Index

A capital budgeting tool that measures the ratio of the present value of future cash flows generated by an investment to the initial investment cost, used to assess the profitability.

Required Rate Of Return

The minimum expected return on an investment necessary for an investor to consider it worthwhile.

Required Return

The expected yield that an investor anticipates receiving on an investment, taking into account the risk associated with it.