What Is a Subgame

question 238

Multiple Choice

What is a subgame?

• A)It is one that begins at any node of the tree, including the game itself.
• B)It is one that begins at any decision node of the tree except the first decision node.
• C)It is one that starts at the final decision node of the tree.
• D)It is a simultaneous game embedded in a sequential game.

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Definitions:

Payback Period

The length of time it takes for an investment to generate an amount of cash flow equal to the initial amount invested.

NPV

Net Present Value, a financial metric used to evaluate the profitability of an investment or project, calculated by discounting the expected future cash flows to present day values and subtracting the initial investment cost.

Discounted Payback Period

The time required to recoup the cost of an investment while accounting for the time value of money, typically used in capital budgeting to assess profitability.

After-Tax Cash Inflows

The net cash that a business generates after accounting for all taxes.