Preferences Depend on

question 420

Multiple Choice

Preferences depend on

• A) income but not relative prices.
• B) relative prices but not income.
• C) neither relative prices nor income.
• D) both relative prices and income.

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Definitions:

Discounted Payback

A capital budgeting method that calculates the amount of time required to recoup the initial investment in present value terms.

Pre-Specified Number

A fixed number that has been determined beforehand, often used in contracts, agreements, or computational formulas.

Investment Acceptance

The approval process for allocating resources or capital into investments, projects, or financial assets.

Payback Period

is the duration needed to recoup the cost of an investment, calculating the time it takes for returns to cover costs.