Suppose Everyone Working the Land in Exland Knows the Usefulness

question 14

Multiple Choice

Suppose everyone working the land in Exland knows the usefulness of investing in land irrigation systems. Those who work the land may choose not to invest in these profitable irrigation systems as long as

• A) the investment is too expensive.
• B) the natural climate, such as abundant rain, makes the irrigation projects unnecessary.
• C) their property rights, with respect to the land, are subject to change.
• D) the government dictates the choice of investment.

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Definitions:

Accounts Payable

Accounts payable represents the amount a company owes to its suppliers or creditors for goods or services received but not yet paid for.

Commercial Paper

Very short-term debt issued by major companies.

Revolving Credit Agreement

A formal, binding agreement with a bank as to the maximum amount a firm can borrow during a period of time. Interest is paid on the amount borrowed and a commitment fee is paid on the unused balance.

Promissory Note

A lending agreement in which the borrower promises to pay principal and interest in accordance with specific terms.