Under current U.S. tax laws, the interest paid on any debt-financed investment ________ tax deductible and the interest expense ________ the net present value of an investment.
A) is not; raises
B) is; lowers
C) is; raises
D) is not; lowers
C) is; raises
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Explain the concepts of absolute advantage and comparative advantage. Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?
What will be an ideal response?
The loss in social surplus that occurs when the economy produces at an inefficient quantity is called
a. efficiency. b. consumer surplus. c. social surplus. d. deadweight loss.
Economists ordinarily favor setting price equal to marginal cost when this option is feasible.
Answer the following statement true (T) or false (F)
A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks, and (2) pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a
a. private goods problem. b. Nash equilibrium. c. Tragedy of the Commons. d. cost-benefit equilibrium.