A firm has to choose between projects X and Y. Project X's internal rate of return is positive. If the cash flow of project Y is discounted at project X's internal rate of return, this firm will
A) choose project X if the net present value of project Y is positive.
B) choose project X if the net present value of project Y is negative.
C) choose project Y if the net present value of project Y is positive.
D) choose project X regardless of the net present value of project Y.
B
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Mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgage payments are known as ________ mortgages
A) reciprocal B) Alt-A C) gray market D) subprime
See Scenario 4.1. What is Daniel's income-consumption curve?
A) Pc = Pd B) Pc = Qc C) Qd = I - 3Qc D) Qc = Qd E) all of the above
Suppose the equilibrium price for pizza is $5 . If the government sets price at $4, the result would be
a. a shortage because at $4, the quantity demanded would exceed the quantity supplied b. a surplus because at $4, the quantity demanded would be less than the quantity supplied c. that the market would remain in equilibrium, but with a larger quantity bought and sold at $5 d. that at $4, the quantity sold would be greater than the quantity bought e. that at the equilibrium price of $5, fewer units would be sold
Which of the following is an example of detrimental externality?
a. A trailer's entry onto an overcrowded road that delays the movement of other vehicles. b. Fall in demand for gasoline in the US softens the price of gasoline in the global market. c. Government investment in energy generation from non-conventional sources. d. Society devotes huge quantity of its scarce resources for vital innovative activity.