Refer to This Output Regarding Part Worths for Brightness, Bulb

question 64

Multiple Choice

Refer to this output regarding part worths for brightness, bulb life, and price in light bulbs to answer the following questions.

-Given the part worths above,which lightbulb will be preferred in the market,a "super bright" bulb that is 100 watts but burns out in 1500 hours and sells for $2.50,or a "long life" bulb that lasts 2500 hours,is 75 watts and sells for $3.00?

• A) the super bright bulb
• B) the long life bulb
• C) The two bulbs will be equally preferred.
• D) There is no way of determining this without more data.

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Definitions:

Estimated Cost

A prediction or approximation of the cost of goods or services, based on current and past information, before the actual expense is known.

Net Present Value

A method used in capital budgeting to determine the profitability of an investment by calculating the sum of its present values of all expected future cash flows.

Present Value Index

A financial metric used to evaluate the present value of future cash flows in relation to the initial investment, also known as the profitability index.

Compound Interest

The method of calculating interest where both the original principal and the accumulated interest from past periods on a loan or deposit are considered.