You Are Trying to Decide Between Three Mutually Exclusive Investment

question 16

Multiple Choice

You are trying to decide between three mutually exclusive investment opportunities.The most appropriate tool for identifying the correct decision is:

• A)NPV.
• B)profitability index.
• C)IRR.
• D)incremental IRR.

---

Definitions:

Elasticity

An economic measure of the responsiveness of the quantity demanded or supplied of a good or service to changes in its price or consumer income.

Unit Wages

The cost of labor per unit of output, measuring how much is paid in wages for the production of one unit of a good or service.

Employed Workers

Individuals actively engaged in a job or business who are receiving compensation for their labor.

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good.