The present value of benefits (PVB) is found as
a. the discounted value of benefits for a single period without adjusting for inflation
b. ?(bt/[1+rs]t), with bt= Bt/(1 + p)t
c. ?(bt/[1–rs]t), with bt= Bt/(1 + p)t
d. ?(bt/[1+rs]t), with bt= Bt/(1 –p)t
b. ?(bt/[1+rs]t), with bt= Bt/(1 + p)t
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Pirates have been intensely attacking ships off the shore of Somalia this year. Boat owners have reportedly coughed up more than $30 million in ransom and insurance premiums have shot up
The pirate activity and increase in premiums means that the expected wealth of boat owners who sail near Somalia is ________. A) decreasing B) increasing C) staying the same D) decreasing only if they have insurance
On average, for the last 100 years or more, real GDP per capita in the United States has increased by
A) 0.5% per year. B) 1% per year. C) 2% per year. D) 4% per year.
Refer to Scenario 7.3. What is the total cost of producing 200 units of output?
A) 100 B) 1000 C) 1500 D) 2000 E) none of the above
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $2,000 and a unit of advertising on the radio costs $5,000. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,500 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers. B) To maximize profits, Franco's should decrease the amount of advertising in flyers. C) To maximize profits, Franco's should decrease the amount of radio advertising. D) Franco's is currently maximizing its profits from advertising.