If the Expected Profitability of a Business Activity Increased We

question 53

Multiple Choice

If the expected profitability of a business activity increased we might expect investment spending to:

• A) increase.
• B) decrease.
• C) remain constant.
• D) there is not enough information to determine what would happen.

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Definitions:

Analysis

The process of examining components or structure of a subject to understand more about it and draw conclusions.

Present Value Calculations

The process of determining the current value of a future sum of money or stream of cash flows, taking into account a specific rate of return or discount rate.

Natural Resources

Raw materials and resources found in the environment that are used for economic gain, such as minerals, forests, water, and fertile land.

Net Benefits

The difference between the total benefits and total costs associated with an economic decision or project.