The Level of Capital Per Person Would Increase If

question 21

Multiple Choice

The level of capital per person would increase if

• A)the average saving rate were higher.
• B)the output-to-capital ratio increased.
• C)the depreciation rate increased.
• D)Both A and B.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or property.

After-Tax Discount Rate

The after-tax discount rate is the rate used to discount future cash flows back to their present value, accounting for taxes, and is crucial in evaluating the after-tax net present value of future cash flows.

Capital Budgeting

The evaluation of investment projects in terms of their potential to increase shareholder value through strategic long-term asset allocation.

Incremental Sales

Incremental sales refer to the additional sales revenue gained from a particular sales activity or decision, beyond what would have been achieved otherwise.