Net Operating Income Is Similar to Which of the Following

question 4

Multiple Choice

Net operating income is similar to which of the following measures of cash flow in corporate finance?

• A) Dividend yield
• B) Earnings before deductions for interest, depreciation, income taxes, and amortization (EBIDTA)
• C) Price-earnings ratio
• D) Discount rate

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Definitions:

Normal Good

A good for which demand increases as the income of consumers increases and vice versa.

Demand for Leisure

The desire for free time in which one can enjoy personal activities outside of work.

Labor Supply Curve

A graphical illustration of the relationship between the wage rate and the quantity of labor workers are willing to supply at various wage rates.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.