You Save $10 on Gas Every Week Because You Take

question 139

Multiple Choice

You save $10 on gas every week because you take the bus to school. You have class 5 days a week. What is your average benefit per day of taking the bus to school?

• A)$10
• B)$5
• C)$2
• D)$0

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Definitions:

Profitability Index (PI)

The present value of an investment’s future cash flows divided by its initial cost; also benefit/cost ratio.

Straight-Line Depreciation

A framework for spreading out the cost of a physical asset across its useful lifespan in identical yearly contributions.

Mutually Exclusive

Mutually exclusive is a statistical term describing two or more events that cannot occur simultaneously, often used in decision making or project selection scenarios.

Internal Rate of Return (IRR)

The Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows from the investment equal to zero.