Brett Buys a New Cell Phone for $100

question 63

Multiple Choice

Brett buys a new cell phone for $100.He receives consumer surplus of $80 from the purchase.How much does Brett value his cell phone?

• A)$180
• B)$100
• C)$80
• D)$20

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Definitions:

Rate of Return

This is a measure of the profitability of an investment, calculated as a percentage of the original investment.

Initial Investment

The amount of money used to start a project, purchase assets, or establish a business operation.

Net Present Value

The Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, often used to assess the profitability of an investment.

Minimum Rate

The lowest acceptable rate of return on an investment, often used in the evaluation of projects or financial decisions.