A mining company has the opportunity to extract from a coal reserve this year for a profit of $40 per pound. The current market rate of interest is 5 percent. The present value of this future extraction is:
A. $36
B. $38
C. $40
D. $42
C. $40
You might also like to view...
Small businesses that operate outside the normal framework of laws and regulations are part of the
a. informal sector b. capital intensive sector c. International Comparison Project d. human capital network e. none of the above
Which of the following statements is TRUE about a non-cooperative game?
A) When two players each have a dominant strategy, joint profits may not be maximized. B) When two players each have a dominant strategy, joint profits are maximized. C) When players use their best responses, joint profits are maximized. D) None of the above.
The questions that an economic system attempts to solve include
A) what to produce. B) how to produce items. C) for whom items are produced. D) all of the above.
Which one of the following accurately states the view of activists who favor discretionary stabilization policy?
a. Neither monetary nor fiscal policy will exert an impact on the real level of economic activity. b. Since we have only limited ability to forecast the future direction of the economy, the best policy is to do nothing. c. Our ability to forecast the future direction of economic activity is quite good, and therefore, discretionary macroeconomic policy is now capable of eliminating fluctuations in the business cycle if policy makers would follow the advice of leading economists. d. The index of leading indicators and other forecasting tools provide policy makers with valuable information that permits them to institute stabilizing changes in macroeconomic policy.