In a Report Made to the U

question 232

Multiple Choice

In a report made to the U.S.Congress in 2001, the National Academy of Sciences cautioned that if fuel economy encourages the production of smaller and lighter cars, "Some additional traffic fatalities would be expected." This statement suggests that

• A)U.S. auto manufacturers are more concerned about producing fuel efficient cars to compete with their Japanese and South Korean rivals than about consumer safety.
• B)there is a trade-off between safety and fuel economy.
• C)society should value safety more highly than fuel economy.
• D)society should value fuel economy more highly than consumer safety because of the long-term environmental benefits generated by less gasoline use.

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Definitions:

Owners

Individuals or entities that possess legal title or right to a property or asset.

Payback Rule

A capital budgeting method that determines the length of time required to recoup the initial investment from the cash inflows produced by the investment.

Time Value

The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.

Profitability Index

A calculation used to assess the attractiveness of an investment, calculated as the present value of future cash flows divided by the initial investment.