A Firm Is Considering the Purchase of a Capital Good

question 98

Multiple Choice

A firm is considering the purchase of a capital good that will generate an additional $400 income each year for 4 years (after which time the capital good is useless and has no scrap value) .The interest rate is 3 percent.It follows that the firm should not purchase the capital good if its price is greater than (approximately)

• A) $1,358.
• B) $1,487.
• C) $1,602.
• D) $1,749.
• E) $1,233.

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Definitions:

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The organ in female mammals where offspring are conceived and in which they gestate before birth; also known as the uterus.

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An individual's personal sense of their own gender, which may or may not correspond with the sex assigned at birth.