Which Would Be Considered an Investment According to Economists

question 49

Multiple Choice

Which would be considered an investment according to economists?

• A)the purchase of government bonds by the nation's central bank
• B)the purchase of a laptop by a university student to prepare her class projects
• C)the construction of a new factory by Intel
• D)the purchase of shares of stock by Manulife, a mutual fund company

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Definitions:

Present Analysis

The evaluation of current financial metrics and economic conditions to make decisions or forecasts about future performance.

Equipment Replacement

Equipment Replacement involves the process of substituting old, inefficient, or broken equipment with newer, more efficient models to maintain operational efficiency.

Incremental Cash Flows

The additional cash flow received by an organization from undertaking a new project, considered essential for analysis in capital budgeting.

Firm's Future Cash Flows

Expected cash receipts and payments a company anticipates over future periods of time.