Which of the Following Statements Is True

question 27

Multiple Choice

Which of the following statements is true?

• A) A rational economic agent is not likely to optimize.
• B) Cost-benefit analysis can also be used for normative economic analysis.
• C) Cost-benefit analysis does not yield the same result as optimization analysis.
• D) The net benefit of an option that costs $50 and provides a benefit of $100 is equal to $150.

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Definitions:

Cash Cycle

The cash cycle, also known as the cash conversion cycle, measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Operating Cycle

The period it takes for a business to acquire resources, produce inventory, sell it in the market, and eventually collect cash from the sale.

Accounts Payable Period

The average amount of time it takes for a business to pay off its suppliers and creditors for purchases made on credit.

Cash Cycle

The time period between the outlay of cash for the production process and the collection of cash from customers.