Dave and Buster Play Two Games of Tennis,and Then Decide

question 98

Multiple Choice

Dave and Buster play two games of tennis,and then decide to go have lunch.Using the concept of utility to explain their choices,we can conclude that:

• A) they each won one game of tennis.
• B) the marginal utility from playing a third game must be negative for them.
• C) the marginal utility from playing a third game must be less than the marginal utility from having lunch.
• D) All of these must be true.

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Definitions:

Internal Rate Of Return

In financial evaluation, it's a measure used to assess the profitability of forthcoming investments, identified by the yield rate that renders the net present value of the project's cash flows neutral.

Required Rate Of Return

The minimum annual percentage return an investor expects to achieve by investing in a particular asset.

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.