Table 18-1 Suppose $1 Billion Is Available in the Budget and Congress

question 155

Multiple Choice

Table 18-1

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1) Subsidies for education, 2) Research on Alzheimer's or 3) Increased border security. Table 18-1 shows three voters' rankings of the alternatives.
-Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to subsidies for education and research on Alzheimer's,

• A)Ivy and Jasmine vote for education subsidies, Rose votes for Alzheimer's research, and education subsidies wins.
• B)Ivy and Rose vote for education subsidies, Jasmine votes for Alzheimer's research, and education subsidies wins.
• C)Jasmine and Rose vote for Alzheimer's research, Ivy votes for education subsidies, and Alzheimer's research wins.
• D)Jasmine and Ivy vote for Alzheimer's research, Rose votes for education subsidies, and Alzheimer's research wins.

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Definitions:

Discount Rate

During discounted cash flow analysis, this is the rate employed to determine the present value of anticipated future cash flows.

Cash Flows

The total amount of money being transferred into and out of a business, often used as an indicator of a company's financial strength.

Discount Rate

The discount rate employed in discounted cash flow analysis to ascertain the present worth of future cash flows.

Annual Salary

The total amount of money that an employee earns in a year from their employer for their services.