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. What is the present discounted value of the expected profits from this investment if the interest rate is 5%?
A. $185.93
B. $276.64
C. $371.89
D. $380.96
Answer: C
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The best example of a cyclically unemployed individual is
A) Charles who lost his job as a real estate salesperson when the housing market went soft because of a recession. B) Alice who quit her job to enter college. C) Mary who lost her job in the textile industry following a decrease in the tariff on textiles. D) Bob who has just graduated from college and is entering the labor market.
Indifference curves are downward sloping because of the assumption of
A) completeness. B) transitivity. C) more is better. D) All of the above.
According to the Taylor rule, if there is a recessionary gap of 3 percent of potential output and inflation is 4 percent, what real interest rate will the Fed set?
A. 3 percent B. 1.5 percent C. 2 percent D. 2.5 percent
___ contains the information or meaning the source hopes to convey
Fill in the blank(s) with the appropriate word(s).