A Decrease in the Demand for Health Care Would Most

question 172

Multiple Choice

A decrease in the demand for health care would most likely result from

• A) newer and more costly medical technology.
• B) more use of defensive medicine.
• C) an aging population.
• D) healthier lifestyles.

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Definitions:

Cost of Capital

The necessary rate of earnings a firm must obtain from its investments to preserve its market worth and secure capital.

Initial Investment

The amount of money invested at the start of a project or business venture to get it off the ground.

Positive Future Cash Flows

The expectation or projection of an increase in the amount of money flowing into a company over a period of time, typically resulting from operations, investments, or financing activities.

Capital Budgeting Technique

A process of evaluating and comparing the potential expenditures or investments which are significant in amount, to determine their worthiness for funding.