Suppose a new cost-saving device will generate $1,000 net savings per year to a firm. The device costs $10,000. Should the firm purchase the device?
A) Definitely.
B) Absolutely not.
C) The firm is indifferent between buying the device and not.
D) More information is required to answer.
D
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The formula for finding the present value of an amount M that will be received one year from now, when the interest rate is R, is
A) M × (1 + R/100). B) M × (1 + R). C) M / (1 + R). D) M / R. E) M / (100R).
A firm's resource at a given point in time can be defined as:
a. those investments made by it in profitable organizations. b. those tangible and intangible assets attached to it semipermanently. c. its ability to control the market price. d. its lobbying ability built over years of experience.
A price floor on the sale of wheat would be likely to benefit
A. bread buyers. B. bread producers. C. wheat farmers. D. flour mills.
The key variable in determining changes in a country's standard of living is the:
A. interest rate. B. long-run rate of economic growth. C. unemployment rate. D. inflation rate.