Refer to the Information Provided in Figure 1

question 218

Multiple Choice

Refer to the information provided in Figure 1.2 below to answer the question(s) that follow. Figure 1.2
-If the slope of a straight line is -3. and if Y (the variable on the vertical axis) decreases by 6, then X (the variable on the horizontal axis) will

• A) increase by 2.
• B) decrease by 2.
• C) increase by 18.
• D) decrease by 18.

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Definitions:

Discount Factor

A multiplier used in discounting to calculate the present value of future cash flows, representing the time value of money.

Working Capital

The contrast between a corporation's immediate financial resources and outstanding obligations, illustrating its short-term monetary health and effectiveness in running its operations.

Net Present Value

A method used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period.

Capital Budgeting

The process of evaluating and selecting long-term investments that are consistent with the firm's goal of wealth maximization.