The PDV of a perpetuity with a yearly payment of $500 at an interest rate of 5% is
A) $100.
B) $5,000.
C) $25,000.
D) $10,000.
E) $100,000.
D
You might also like to view...
To maximize profit, a firm hires the quantity of labor that makes the ________ of labor equal to the ________
A) value of marginal product; wage rate B) total revenue; total cost of labor C) marginal product; total cost of labor D) marginal product; marginal revenue
In a business cycle, a period from trough to peak may be referred to as ________
A) a contraction B) an expansion C) a recurrence D) all of the above E) none of the above
If a good has an absolute price elasticity of 0, the demand for the good is
A) unit elastic. B) inelastic. C) perfectly inelastic. D) elastic.
If a profit-maximizing firm is currently producing where MR = MC, it should
A. decrease output so that marginal revenue will be greater than marginal cost and the firm's profit will increase. B. exit the industry. C. not change because it is already maximizing profit. D. increase output so that marginal revenue is less than marginal cost.