Refer to the Information Provided in Table 21

question 21

Multiple Choice

Refer to the information provided in Table 21.2 below to answer the questions that follow.
Table 21.2
The data in the table was used to estimate the following consumption function: C = 12 + 0.4Y.
-Refer to Table 21.2. The error for point D is equal to

• A) -2.
• B) -1.
• C) +2.
• D) +4.

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Definitions:

Required Return

The minimum expected yield by investors as compensation for the level of risk associated with an investment.

Initial Investment

The amount of money used to start a project, business, or investment.

Cash Break-even Point

The point at which a business generates enough cash flow to cover its operating expenses, without generating a profit or loss.

Variable Cost

Expenditures that fluctuate according to the degree of production or the volume of goods produced.