Dynaflex Corp. is considering an investment project that costs $900 today. It expects the project will yield income of $350 at the end of years 1, 2, and 3. If the interest rate is 10%, the firm
A. is just indifferent between undertaking the investment and not.
B. should forgo the investment.
C. should undertake the investment.
D. indeterminate from the given information
Answer: B
You might also like to view...
Capacity utilization increases. What is the impact on aggregate expenditures and income?
A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases.
If a shoe monopoly experiences an outward shift in its demand curve, the industry demand curve for shoes must have
a. shifted slightly less b. been flat to begin with c. shifted slightly more d. shifted more quickly e. made the exact same shift
The first year of the Bush administration in 2001 could be represented as a(n)
a. increase in the aggregate demand curve. b. decrease in the aggregate demand curve. c. increase in the aggregate supply curve. d. decrease in the aggregate supply curve.
A swing at a popular, unfenced public park is:
A. a collective good. B. a pure public good. C. nonrival. D. nonexcludable.