If a manager has determined that a particular piece of capital is likely to increase the cash flow of a business by $10,000 for the next five years, what is the present value of the capital at an interest rate of 10 percent? (Assume that the cash flow first increases one year from today.)
What will be an ideal response?
PV = ($10,000)/(1.1) + ($10,000)/(1.1)2 + ($10,000)/(1.1)3 + ($10,000)/(l.1)4 + ($10,000)/(1.1)5 = $37,907.87
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One part of the explanation for the persistently high rates of unemployment in Western Europe is:
A. labor market rigidities. B. productivity growth. C. increases in labor supply. D. increases in labor demand.
According to this Application, workers in the EU were more productive than workers in Latvia in the 1990s, yet EU nations still purchased products from Latvia. This is because Latvia ________ in the production of the products it sold to EU nations
A) used fewer resources B) had a higher opportunity cost C) had an absolute advantage D) had a comparative advantage
According to the ________ Phillips curve, the unemployment rate and the inflation rate are negatively related
A) long-run and short-run B) rational expectations C) short-run D) long-run
Economist Steven Levitt argues the Supreme Court decision ________ had an impact on reducing crime during the 1990s because it is associated with "wantedness."
A. on gay marriage B. on school bussing C. on abortion D. on prayer in schools