Your Roommate Is Studying to Be a Chef and Likes

question 99

Multiple Choice

Your roommate is studying to be a chef and likes to try new recipes.He leaves his delicious creations in the refrigerator for anyone who wants to eat them.The food he leaves is always gone within a day.This is an example of:

• A) the commons problem.
• B) the tragedy of the commons.
• C) an internal cost.
• D) the free-rider problem.
• E) a positive externality.

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Definitions:

Present Value

The value today of a sum of money or cash flow expected in the future, adjusted for a particular return rate.

Earnings Rate

The rate of return on investment or the rate at which profits are generated from a business or investment.

Cash Payback Period

The time it takes for an investment to generate enough cash flow to recover its initial cost, used in capital budgeting.

Useful Life

Useful life is the estimated duration of time that an asset is expected to be usable by the company, affecting its depreciation and amortization calculations.