Analysts Convert Future Values of Benefits to Their Present-Value Equivalent

question 26

Multiple Choice

Analysts convert future values of benefits to their present-value equivalent by "discounting" them at the organization's cost of funds with the ______ method.

• A) Breakeven
• B) Business case
• C) NPV
• D) ROI

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford given their income and the prices of the goods.

Money Income

The total earnings received by an individual or household in the form of wages, salaries, benefits, and other monetary sources before any deductions.

Prices

The amount of money required to purchase a good or service, determined by factors like supply, demand, and market competition.

Marginal Rate

The rate at which a quantity increases or decreases as a result of a unit change in another variable, often used in the context of taxation or utility.