Why Might a Homemaker Be Upset with the Way Gross

question 174

Multiple Choice

Why might a homemaker be upset with the way Gross Domestic Product (GDP) is calculated?

• A) Because the government always underestimates the dollar value of the household services produced at home and outside the market that are included in the Gross Domestic Product (GDP) statistic
• B) Because household services produced at home and outside the market are only included in Gross Domestic Product (GDP) if the homemaker is a man
• C) Because household services produced at home and outside the market that are sold to others are not included in Gross Domestic Product (GDP)
• D) Because none of the household services produced for at home and outside the market are included in Gross Domestic Product (GDP) even though they contribute greatly to the welfare of the family

Understand the principles and calculations involved in capital budgeting including NPV, IRR, PI, and payback period.

Ability to rank projects based on profitability index and understanding its implications.

Understand the relationship between a project's payback period and its NPV.

Calculate the NPV for various projects given cash flows and discount rates.