Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. purchase the truck if the real interest rate is less than 5%.
B. not purchase the truck if the real interest rate is greater than 1%.
C. purchase the truck if the real interest rate is less than 15%.
D. purchase the truck if the real interest rate is greater than 5%.
Answer: A
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Which of the following is true at the output level where average total cost is at its minimum?
A) Marginal cost equals average variable cost. B) Average variable cost equals fixed cost. C) Average total cost equals average fixed cost. D) Marginal cost equals average total cost.
The results of studies of the tobacco industry suggests that college and secondary school students who smoke are much more likely to respond to a change in price than adults who smoke
Indicate whether the statement is true or false
The quantity theory of money implies that if the money stock were to double, the price level would
a. fall by one half. b. rise, but only slightly. c. also double. d. be unchanged. e. all of the above.
The PE ratio for a stock is
A) the predicted earnings per share of the stock divided by its current yield. B) the current yield of the stock. C) the price of the stock divided by its earnings per share. D) the predicted volatility of the stock.