Suppose the interest rate is 5 percent, the expected growth rate of the firm is 2 percent, and the firm is expected to continue forever. If current profits are $1,000, what is the value of the firm?
A. $26,500
B. $30,000
C. $35,000
D. $31,000
Answer: C
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Modern economists measure how much utility Fred gets from a hot dog by
A. asking Fred how many utils he gets from its consumption. B. examining the price of the hamburger Fred chose not to buy. C. asking Fred how much of some other good he would give up to get the hot dog. The “other good” can be any good except money. D. asking Fred how much of some other good he would give up to get the hot dog. The “other good” can be any good, including money.
Plowback refers to the profits management decides to keep and reinvest in the firm's operations
a. True b. False Indicate whether the statement is true or false
An example of U.S. foreign direct investment would be a:
A. factory in Japan owned by a Canadian citizen. B. factory in Canada owned by a U.S. citizen. C. factory in New Mexico owned by a Japanese citizen. D. All of these are examples of foreign direct investment.
Services can be thought of as
A) unvalued goods. B) unwanted goods. C) free goods. D) intangible goods.