Use the Figure Below to Answer the Following Questions

question 43

Multiple Choice

Use the figure below to answer the following questions.
Figure 3.2.2
-Which one of the following would result in the demand curve shifting from D₁ to D₂ in Figure 3.2.2?

• A)an increase in the supply of pizza
• B)a rise in the price of hamburgers,a substitute for pizza
• C)a rise in the price of pizza
• D)a fall in the price of pizza
• E)a rise in the price of Coke,a complement of pizza

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Definitions:

NPVGO

Net Present Value of Growth Opportunities refers to the present value of all future cash flows that a new project is expected to generate after accounting for the initial investment cost.

Equity Cost Of Capital

The rate of return that shareholders require on the equity or ownership interest they have in a company, used in evaluating investments and capital projects.

Firm's Equity

The value of a company's assets minus its liabilities and obligations, representing the ownership stake of the company's shareholders.