If Al Is Risk Averse, as His Wealth Increases, His

question 202

Multiple Choice

If Al is risk averse, as his wealth increases, his total utility of wealth ________ and his marginal utility of wealth ________.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

Identify and assess various complicating factors in capital investment decisions, such as leasing alternatives, price levels, and tax considerations.

Calculate and interpret the net present value (NPV) of an investment and utilize it to make investment decisions.

Utilize the internal rate of return (IRR) method for evaluating investment opportunities and compare it to the company's desired rate of return.

Analyze and appraise capital investments using the concept of the time value of money.