How Is the Economic Perspective Reflected in Lines for Fast

question 27

Multiple Choice

How is the economic perspective reflected in lines for fast food?

• A) Customers select the shortest line because they have perfect information.
• B) Customers select the shortest line because they believe it will reduce their time cost of obtaining food.
• C) Lines will typically be of unequal length because of the inefficiencies in counter service.
• D) The set of food choices is often too complex for customers and thus creates long lines.

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Definitions:

Internal Rate of Return

A financial 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.

Present Value Factor

A multiplier used to calculate the present value of a future amount of money or stream of payments.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion.

Desired Rate

Typically refers to a target interest rate set by an individual or entity, often relating to the return on investment or loan interest rates they wish to achieve.