Which of the Following Would Be the Most Likely Result

question 39

Multiple Choice

Which of the following would be the most likely result from a new government program that provided significant financial aid for children of low- and middle-income families to attend college?

• A) Starting salaries for new college graduates would rise because of an increase in the number of high-quality graduates.
• B) Starting salaries for college graduates would be unaffected.
• C) The productivity of the labor force would be permanently lower because more young people would choose to be students instead of workers.
• D) Starting salaries of new college graduates would fall as the supply of graduates increased.

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Definitions:

Average Accounting Return

A financial ratio that measures the net profit of a project or investment as a percentage of its initial cost.

Straight-line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal yearly amounts.

Net Income

The comprehensive earnings of a corporation after expenses and taxes have been taken away from its revenues.

Discount Rate

A rate used to determine the present value of future cash flows, reflecting the time value of money and risk of the cash flows.