What Discount Rate Should Be Used in Net Present Value

question 49

Multiple Choice

What discount rate should be used in Net Present Value assessments?

• A)The weighted average cost of capital of the business
• B)The government bond rate
• C)The specific cost of capital associated with funding a particular project
• D)The expected rate of return required by ordinary shareholders

Understand how autonomous investments affect aggregate expenditure and its impact on the economy.

Calculate and understand the implications of the simple spending multiplier based on the marginal propensity to consume and save.

Recognize how changes in the price level influence consumption, exports, and the aggregate demand curve.

Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.

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Definitions:

Gametophyte

The sexual phase in the life cycle of plants and algae that produces gametes.

Gymnosperm

Type of woody seed plant in which the seeds are not enclosed by fruit and are usually borne in cones, such as those of the conifers.

Cycad

Type of gymnosperm with palmate leaves and massive cones; cycads are most often found in the tropics and subtropics.

Classified

Categorized or organized into groups based on shared characteristics or attributes.