A logging company is considering logging an area for a current cost of $500 per acre to obtain a profit the next year for $600 per acre. The market rate of interest is 10 percent. Should the company make the investment?
A. Yes, the future value of the profit is greater than the present value of the cost
B. No, the future value of the profit is less than the present value of the cost
C. Yes, the present value of the profit is greater than the present value of the cost
D. No, the present value of the profit is less than the present value of the cost
C. Yes, the present value of the profit is greater than the present value of the cost
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An increase in money supply causes the real interest rate to ________ and the price level to ________ in general equilibrium
A) rise; rise B) remain unchanged; fall C) remain unchanged; rise D) fall; fall
If the Fed decides to increase interest rates to fight off potential inflation, and their policy action kept the inflation rate stable, then other things equal, this would result in
A) the IS curve shifting to the right. B) the IS curve shifting to the left. C) the MP curve shifting up. D) the MP curve shifting down.
A perfectly competitive firm producing 100 units of output per period finds that: Average total cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the product is $15. This firm should
a. produce more output b. raise the price of its product c. reduce production without shutting down d. shut down (reduce output to zero) e. do nothing (it is currently maximizing profit)
The first major piece of antitrust legislation was the
a. Clayton Act. b. Obama Care Act. c. Sherman Act. d. Clinton Act.