Borrowing and Lending Projects Usually Can Be Distinguished by Whether

question 28

Multiple Choice

Borrowing and lending projects usually can be distinguished by whether:

• A) they have positive or negative IRRs.
• B) the time-zero cash flow is positive or negative.
• C) their IRR increases as the discount rate increases.
• D)their rate of return is high or low.

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Definitions:

Inelastic Demand

Describes a situation where the demand for a good or service changes little when its price changes.

Total Revenue

The total amount of money generated from the sale of goods or services.

Decrease

A reduction in quantity, size, intensity, or the number of something.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity of goods demanded, leading to market balance.