You are considering the purchase of a business that is currently earning $25,000 per year in after-tax profit. If these conditions are expected to continue year after year into the future, and the interest rate is currently 10 percent, the current market value of this business is
a. $2,500.
b. $25,000.
c. $250,000.
d. $2,500,000.
C
You might also like to view...
Is a tornado siren excludable? Is it rival in consumption? How do we classify a tornado siren in terms of the four types of goods?
Lower real wages make it ______.
a. more profitable to hire new workers b. less profitable to hire new workers c. more likely that short-term unemployment will increase d. less likely that real wages will move toward equilibrium
Technological advances generally result in
A) decreased incomes. B) increased life expectancy. C) increased infant mortality rates. D) increased average number of hours worked per day.
A cartel is a group of firms that ________ to make price and output decisions.
A. explicitly colludes B. implicitly colludes C. act independently D. are unable