Refer to the Table Below A)3/4 of a Cake

question 145

Multiple Choice

Refer to the table below. Martha's opportunity cost of making of a pie is: $$\begin{array} { | l | c | c | } \hline & \begin{array} { c } \text { Time to } \\\text { Make a Pie }\end{array} & \begin{array} { c } \text { Time to } \\\text { Make a Cake }\end{array} \\\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \\\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \\\hline\end{array}$$

• A)3/4 of a cake.
• B)4/3 of a cake.
• C)8 cakes.
• D)80 cakes.

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Definitions:

After-Tax Discount Rate

The after-tax discount rate is the rate used to discount future cash flows back to their present value, accounting for taxes, and is crucial in evaluating the after-tax net present value of future cash flows.

Capital Budgeting

The evaluation of investment projects in terms of their potential to increase shareholder value through strategic long-term asset allocation.

Incremental Sales

Incremental sales refer to the additional sales revenue gained from a particular sales activity or decision, beyond what would have been achieved otherwise.

Operating Expenses

Costs associated with the day-to-day operations of a business that are not directly tied to the production of goods or services.