Your Instructor Advised You to Study for at Least a Week

question 131

Multiple Choice

Your instructor advised you to study for at least a week before your economics test. If you ignored his advice and only studied for one hour just before the test, your studying probably has ________ total benefits and ________ marginal benefits.

• A) zero; infinite.
• B) high; low.
• C) low; high.
• D) high; high.
• E) low; low.

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Definitions:

Investment Project

A project involving the allocation of capital resources to long-term assets that produce returns over time.

Working Capital

A measure of a firm's short-term financial health and its ability to cover its short-term obligations with its short-term assets.

Discount Factor

A multiplier used to discount future cash flows back to their present value, reflecting the time value of money.

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, calculated as the rate at which the net present value of costs equals the net present value of benefits.