All Other Things Being Equal, Which of the Following Would

question 21

Multiple Choice

All other things being equal, which of the following would be the most attractive to an investor?

• A) A cash inflow of $10,000 in five years.
• B) A cash inflow of $2,000 each year for the next five years.
• C) A cash inflow of $5,000 in year 1 and $5,000 in year 5.
• D) A cash inflow of $10,000 today.
• E) All of these would be equally attractive to an investor.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage.

Gasoline Supply

The total amount of gasoline available for purchase in a market, influenced by factors like production rates and import levels.

Price Elasticity of Supply

An indicator of the responsiveness of the supply of a product to variations in its price.

Homestead Exemption

A law permitting a debtor to retain the family home, either in its entirety or up to a specified dollar amount, free from the claims of unsecured creditors or trustees in bankruptcy.