Other Things Remaining the Same, the Greater the Expected Profit

question 20

Multiple Choice

Other things remaining the same, the greater the expected profit

• A) the less the amount of investment.
• B) the greater the amount of investment.
• C) the steeper is the investment demand curve.
• D) the flatter is the investment demand curve.

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Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the strategy and financial performance of an organization.

Payback Period

The payback period is a capital budgeting metric that measures the time required for an investment to generate cash flows sufficient to recover its initial cost, helping assess the risk and efficiency of an investment.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used as a method for evaluating the profitability of an investment.