Refer to the Above Diagram

question 19

Multiple Choice

Refer to the above diagram.The break-even level of disposable income:

• A)is zero.
• B)is minus $10.
• C)is $100.
• D)cannot be determined from the information given.

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Definitions:

Cash Inflow

Money received by a business, typically from operational, investing, and financing activities.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Compound Interest

This refers to the calculation of interest on both the initial amount deposited or borrowed as well as on the interest that has already been accumulated over previous periods.

Desired Rate of Return

The minimum percentage of gain or profit expected by an investor from an investment.