The Less Certain a Cash Flow, The__________the Risk, and The__________the

question 118

Multiple Choice

The less certain a cash flow, the__________the risk, and the__________the value of the cash flow.

• A) lower; lower
• B) higher; higher
• C) lower; higher
• D) higher; lower

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Definitions:

Consumer Surplus

A measure of the difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

Price

The price one must pay to obtain a service or product.

Surplus Amount

The excess of revenues over expenditures in a budget, or inventory beyond what is currently needed.

Consumer Surplus

The gap between what consumers are prepared to spend on a good or service and what they end up paying.