In Comparing These Two Alternatives,which Is the Correct Evaluation

question 68

Multiple Choice

In comparing these two alternatives,which is the correct evaluation?

• A) Truck A should be purchased as the net present value of the costs of this alternative is the lowest.
• B) Truck A should be purchased as the net present value of the costs of this alternative is the highest.
• C) Truck B should be purchased as the net present value of the costs of this alternative is the lowest.
• D) Truck B should be purchased as the net present value of the costs of this alternative is the highest.

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Definitions:

Government Expenditures

The total amount spent by the government for its operations, public services, and social welfare programs.

Aggregate Spending

The total spending on goods and services in an economy at a given overall price level and in a given time period.

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another, like income.

Consumption Spending

The total amount of money spent by households and consumers on durable goods, nondurable goods, and services.