The Following Question Are Based on the Following Information Regarding

question 33

Multiple Choice

The following question are based on the following information regarding the gross monthly receipts of a miniature golf course in a resort community at the shore.

-When the price per game is decreased from $4.50 to $4.00

• A) the number of games played remains the same.
• B) demand becomes price elastic.
• C) the number of games played must have fallen, but there is not enough information to tell by how much.
• D) the percentage increase in the number of games is equal to the percentage decrease in price.
• E) the profits of the golf course rise significantly.

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Definitions:

Free Cash Flows

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Cost of Equity Capital

The return a company must earn on its equity investments to compensate its shareholders for the risk they take by investing.

Book Value

The value of an asset as it appears on a company's balance sheet, calculated as the cost of the asset minus any depreciation, amortization, or impairment costs already applied.

Equity Capital

Equity capital is the amount of money that is invested into a company by its owners in exchange for shares of ownership.