What Does This Graph Suggests About Our Current Use of Fossil

question 52

Multiple Choice

What does this graph suggests about our current use of fossil fuels?

• A)We are treating this resource sustainably as the number of barrels of oil consumed has increased over time.
• B)We are depleting this non-renewable resource at a rate faster today than 20 years ago.
• C)The price of oil will continue to decrease as there is more oil supply than there is demand.
• D)We have found many new sources of oil as reflected in the increase in oil consumption.

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Definitions:

Soft Capital Rationing

Internal limitations set by a company's management on the amount of funding allocated for new projects.

Debt Covenants

Agreements between a borrower and lender that stipulate certain conditions the borrower must adhere to, which can pertain to financial ratios, levels of income, or other financial benchmarks.

Time Value

The idea that having money now is more valuable than having the same sum at a later date because of its ability to earn more over time.

Profitability Index

A financial tool used to determine the relationship between the costs and benefits of a proposed project, calculated by dividing the present value of future cash flows by the initial investment.