A Maximum Legal Price That May Be Charged for a Particular

question 176

Multiple Choice

A maximum legal price that may be charged for a particular good or service is known as a

• A) price floor.
• B) price ceiling.
• C) black market.
• D) price support.

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Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business, especially as affecting liquidity.

Average Accounting Return

A measure of profitability calculated as the average net income divided by the average book value of investment over a period.

Annual Net Incomes

The total profit of a company after all expenses and taxes have been deducted from revenues for one year.

Salvage Value

The estimate of an asset's worth at the end of its useful life.