An Economist Noticed That Nations with More TV Sets Have

question 1

Multiple Choice

An economist noticed that nations with more TV sets have higher life expectancy.He established a strong positive association between length of life and number of TV sets.Describe three different possible cause-and-effect relationships that might be present.

• A)Perhaps more TV sets cause higher life expectancy,higher life expectancy cause more TV sets,or both could be caused by a lurking variable such as the wealth of the nation.
• B)There is only one cause-and-effect relationship: more TV sets cause higher life expectancy.
• C)Perhaps more TV sets cause higher life expectancy,higher life expectancy cause more TV sets,or both could be caused by a lurking variable such as the TV sets brand.
• D)There is only one cause-and-effect relationship: higher life expectancy cause more TV sets.
• E)There are only two cause-and-effect relationships: more TV sets cause higher life expectancy,or higher life expectancy cause more TV sets.

Estimate income tax expenses based on cash flows and understand their effect on project net cash flows.

Distinguish between incremental sales and operating expenses in projecting future cash flows.

Appreciate the role of after-tax discount rates in the valuation of future cash flows.

Recognize the importance of working capital management in the context of project completion and its release for use elsewhere.

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Definitions:

Financial Advantage

The benefit gained in financial terms, likely leading to improved profitability or reduced expenses.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much revenue is contributing to fixed expenses and profit.

Labor Hours

A measure of the amount of work or effort in terms of hours spent by workers in producing goods or providing services.

Profitable Use

The utilization of resources or assets in a way that generates a financial gain.