A firm's inventory is the orders for goods that have yet to be produced.
Answer the following statement true (T) or false (F)
False
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Sarah is considering lending an amount of $45,000 to her friend who promises to return $60,000 after the end of ten years
What is the net present value of Sarah's investment? Is it worthwhile to undertake this investment? Assume that the market rate of interest is 6%.
An economy's production possibility curve will be a straight line if: a. resources are not equally substitutable among productive tasks
b. the economy experiences significant unemployment. c. the opportunity cost of production of a good decreases as more of it is produced. d. the opportunity cost of production of a good is constant as more of it is produced.
The definition of human capital refers to
a. worker education and workers' equipment. b. worker education and workers' physical capital. c. workers' equipment and workers' physical capital. d. worker education and worker training.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. If John decides to expand based on expected value, it means that:
A. the sum of expected earnings from expanding and from not must exceed $150,000. B. his expected earnings from expansion must exceed $150,000. C. the difference in expected earnings from expanding versus not must exceed $150,000. D. the difference in expected earnings from expanding versus not must not exceed $150,000.