Exhibit 5.3 -Refer to Exhibit 5.3,which Shows a Linear Demand Curve.Between Points

question 19

Multiple Choice

Exhibit 5.3

-Refer to Exhibit 5.3,which shows a linear demand curve.Between points B and C,the elasticity of demand is ____ and demand is _____.

• A)1; unit elastic
• B)1.89; elastic
• C)0.73; inelastic
• D)infinity; perfectly elastic
• E)1; perfectly inelastic

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Definitions:

Net Present Value

This signifies the net difference in present value terms of cash received versus cash paid out over an outlined time interval.

Internal Rate of Return

The discount rate at which the net present value of all cash flows (both positive and negative) from a project or investment equals zero.

Decision Rule

A guideline or criterion that aids in making choices between alternative courses of action.

Net Present Value (NPV)

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period, used for assessing profitability of investments.