Suppose We Look at Two Distant Galaxies: Galaxy 1 Is

question 69

Multiple Choice

Suppose we look at two distant galaxies: Galaxy 1 is twice as far away as Galaxy 2. In that case ________.

• A) Galaxy 1 must be twice as big as Galaxy 2
• B) we are seeing Galaxy 1 as it looked at an earlier time in the history of the universe than Galaxy 2
• C) we are seeing Galaxy 1 as it looked at a later time in the history of the universe than Galaxy 2
• D) Galaxy 2 must be twice as old as Galaxy 1

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Definitions:

NPV (Net Present Value)

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated by subtracting the total present values of cash outflows from the total present values of cash inflows.

IRR (Internal Rate of Return)

A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from the central bank's discount window.

High-risk Projects

High-risk projects are those that come with a greater uncertainty regarding outcomes, potentially offering higher returns alongside increased potential for loss.