Figure 20.2: IS Curve

question 61

Multiple Choice

Figure 20.2: IS Curve
-Consider Figure 20.2. If ________ is the IS curve without the interest rate gap, ________ is the IS curve that includes the interest rate gap.

• A) IS₂; IS₅
• B) IS₁; IS₄
• C) IS₁; IS₅
• D) IS₁; IS₃
• E) IS₃; IS₅

Understand the treatment of depreciation and working capital in cash flow computations.

Appreciate the impact of project features such as lifespan, salvage value, and initial cost on various investment appraisal methods.

Learn about the relevance of the project profitability index and simple rate of return in investment decisions.

Understand the differentiation between preference and screening decisions in capital budgeting.