Tom's Donuts can invest in a new espresso machine that costs $300 and will yield expected profits of $200 each year for two years. At lower interest rates, the present discounted value of profits from the investment
A. decreases.
B. increases.
C. is unchanged.
D. is indeterminate from the given information.
Answer: B
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The aggregate supply curve shows
A) the total of all planned production for an economy. B) that real GDP can only increase when the price level increases. C) what an economy can produce if resource prices are constant. D) the various quantities of goods consumers will purchase.
If an up-scale jewelry maker sells its products to retailers with the explicit condition that the retailers may not resell the products below a specified price, the jewelry maker is likely concerned about ________.
A) output restrictions B) market division C) its reputation D) price fixing
Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will ________ in Alpha compared to Beta, holding other factors constant.
A. increase output by the same amount B. increase output less C. have no effect on output D. increase output more
The labor force includes individuals who are:
I. Employed II. Unemployed III. Discouraged workers A) Both I and III B) I only C) Both I and II D) All I, II and III