A firm has to decide between two projects that cost $10,000 each. Project A will provide a revenue $10,700 one year from now, while Project B will provide a revenue of $12,200 two years from now. The interest rate is 10% per year. This firm
A) chooses project A.
B) chooses project B.
C) rejects both projects.
D) is indifferent between projects A and B.
B
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A production possibilities frontier shows the combinations of various goods that should be produced
a. True b. False Indicate whether the statement is true or false
When there is an excess demand for money, households will _____ interest-bearing bonds, causing interest rates to _____
Fill in the blank(s) with correct word
Yet 57 days before a flight, the lowest average was 19% lower, at $____
Fill in the blank(s) with the appropriate word(s).
According to Tobin’s q theory of investment,
a) when the stock market undervalues a company, the company should invest in capital expansion b) when a firm’s bond prices rise, the firm should sell off existing assets c) borrowing funds by issuing bonds is always a less expensive way than issuing stock to raise funds for investment d) a firm should buy capital when its stock market valuation exceeds the replacement cost of capital e) firms should invest at a constant rate each month, a practice known as dollar-cost averaging