Use the Information Below to Answer the Following Question

question 95

Multiple Choice

Use the information below to answer the following question. Figure 5.2.7
-Sal likes to eat pizza.The ________ is the maximum amount that Sal is willing to pay for one more slice of pizza.

• A)market price
• B)marginal cost
• C)consumer surplus
• D)marginal benefit
• E)producer surplus

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Definitions:

Personal Leverage

The use of borrowed funds by an individual to increase the potential return of investment.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project, comparing the value of all cash inflows and outflows over time, discounted back to their present value.

Indirect Bankruptcy Costs

The costs associated with bankruptcy that are not directly related to legal or administrative expenses, such as lost sales, customers, or suppliers.

Financial Leverage

Employing debt to boost the potential earnings from an investment.