A firm is deciding whether or not to close down its plant and modernize by installing new technology. Which of the following should management ignore when making the decision?
A. Cost of lost sales while the plant is closed
B. How much the present plant cost
C. Added cost of the labor needed for the new plant
D. All of the above
Answer: B
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A lower discount rate discourages banks from borrowing reserves and making loans. Therefore, if the Fed wants to expand the money supply, it raises the discount rate
a. True b. False Indicate whether the statement is true or false
Amazon's rise to become the world's largest online retailer was largely driven by:
A. an exclusive license granted by the U.S. government. B. patents on online selling that keeps other firms out of the market. C. far superior products than other online sellers could offer. D. massive economies of scale in distribution logistics and data storage.
According to Keynes, the primary determinant of Amy's saving is
A. the level of Amy's real current income. B. the level of Amy's consumption spending. C. the real interest rate. D. the nominal interest rate.
The Big Mac index uses prices of a common item to predict long-run changes in exchange rates
a. True b. False Indicate whether the statement is true or false