At This Week's Seminar, One of the Participants Asked the Chief

question 53

Multiple Choice

At this week's seminar, one of the participants asked the chief of police to comment on crime rates. Which statement below would the chief be able to state with certitude?

• A) ​"Speculating about future crime trends is risky because change can occur rapidly."
• B) ​"Crime rates will continue to decrease because they have been decreasing for the past 20 years and crime trends move in 40-year cycles."
• C) ​"Crime rates will most likely increase because the baby boomer population is increasing."
• D) ​"All U.S. cities will experience a decrease in crime rates next year because international crime rates continue to decline."

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Definitions:

Initial Cash Outflow

The initial amount of money paid out or expended, typically for an investment or purchase, before any returns are considered.

Required Return

The minimum rate of return an investor expects to achieve by investing in a particular asset or project.

Required Rate

The least yearly interest rate that persuades individuals or entities to dedicate capital to a distinct project or investment opportunity.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time. It's used in capital budgeting to assess the profitability of an investment or project.