In Evaluating Capital Budgeting Alternatives, There Are Two Primary Methods

question 52

Short Answer

In evaluating capital budgeting alternatives, there are two primary methods that do not consider the time value of money. These methods are ________ and ________. There are also two primary methods that consider the time value of money; these are ________ and ________.

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Definitions:

Consumer Surplus

The distinction between the aggregate amount consumers are inclined and capable of paying for a service or product and what they actually disburse.

Minimum Imposed Price

A price floor set by the government or a regulatory body, below which the price of a good or service cannot fall.

Producer Surplus

The difference between the amount producers are willing and able to supply a good for and the actual amount received by them when the good is sold.

Consumer Surplus

The variance between the price consumers are ready to offer for a good or service and the price they actually incur.