If a Technological Advance Makes It Possible to Produce Computers

question 80

Multiple Choice

If a technological advance makes it possible to produce computers at a lower cost

• A) the demand for computers increases.
• B) the demand for computers decreases.
• C) the supply of computers increases.
• D) the supply of computers decreases.

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Definitions:

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Desired Rate of Return

The minimum expected yield by investors for their investment, reflecting the risk level and opportunity cost.

Initial Investment

The amount of money put into a project or investment at the beginning, before any returns are realized.

Inflation

A period when prices in general are rising and the purchasing power of money is declining.