Marvin,who Lives in San Francisco,has Been Asked to Host a Teenage

question 43

Multiple Choice

Marvin,who lives in San Francisco,has been asked to host a teenage alien,Regor,as part of an intergalactic exchange program.Marvin is sure that Regor would love to experience the adventure of sailing,but decides he should introduce the concept of a "sailboat" first.Marvin tries to describe the common features of a sailboat.He explains that they are pointed at the front and square at the back,have a tall mast to hold up the sail,and have one or two triangular sails.Which of the following demonstrates a problem with this approach?

• A)Some sailboats have more than one mast and more than two sails.
• B)This description does not describe a specific sailboat.
• C)This description does not provide an average of all relevant features.
• D)Some sailboats are longer than others.

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Definitions:

Incremental Cost Approach

A method used to analyze the financial impact of additional costs incurred when making business decisions.

Discount Rate

In discounted cash flow (DCF) analysis, this rate is applied to calculate the present value of anticipated cash flows.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Discount Rate

In finance, it is the interest rate used to determine the present value of future cash flows. In monetary policy, it's the rate at which commercial banks borrow from the central bank.