Table 4-1 -Refer to Table 4-1.The Table Above Lists the Highest Prices

question 197

Multiple Choice

Table 4-1

-Refer to Table 4-1.The table above lists the highest prices three consumers,Curly,Moe,and Larry,are willing to pay for a bottle of champagne.If the price of the champagne falls from $24 to $14

• A)consumer surplus increases from $32 to $53.
• B)Curly will buy four bottles; Moe will buy two bottles,and Larry will buy one bottle.
• C)consumer surplus will increase from $80 to $95.
• D)Larry and Moe will receive more consumer surplus than Curly.

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Definitions:

Net Cash Inflows

The total cash receipts minus cash payments over a period of time from operational, financial, and investing activities.

Profitability Index

A financial metric that measures the return on a project or investment relative to its cost, calculated by dividing the present value of future cash flows by the initial investment cost.

Internal Rate

Typically refers to the internal rate of return (IRR), which is a financial metric used to estimate the profitability of potential investments.

Payback Period

The amount of time it takes for an investment to generate cash flows sufficient to recover its initial cost, commonly used to assess the feasibility of projects.