Scarcity Exists Because

question 109

Multiple Choice

Scarcity exists because

• A) there is a temporary disruption in the market supply.
• B) there is a shortage of goods caused by a natural disaster.
• C) there are not enough resources available to produce all the goods that people want.
• D) there is a shortage of labor throughout the world.

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Definitions:

Internal Rate

Commonly known as the Internal Rate of Return (IRR), it represents the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Modified Internal Rate

A version of the internal rate of return (IRR) adjusted for scale and risk, providing a more accurate reflection of an investment's profitability.

Cost of Capital

The critical rate of return a firm is required to earn on investment projects to hold its market stance and entice financiers.

NPV Method

Net Present Value method, a financial analysis tool used to determine the value of an investment by discounting future cash flows to their present value.