-A Price Floor Represents

question 155

Multiple Choice

-A price floor represents

• A) a maximum price that can be legally charged for a product or service.
• B) a minimum price that can be legally charged for a good or service.
• C) a lottery imposed upon producers by the government.
• D) a first come, first served mechanism for controlling prices.

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Definitions:

Required Rate of Return

The minimum annual percentage return a investor expects to achieve from an investment, considering the risk involved.

Simple Rate of Return

A method of evaluating the financial performance of an investment by dividing annual incremental operating income by initial investment.

Cash Flows

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Accounting Net Income

The profit of a company after all expenses and taxes have been deducted from revenues.