Consider a Firm Making a Decision to Purchase a Unit

question 10

Multiple Choice

Consider a firm making a decision to purchase a unit of capital - let's say, a forklift . In terms of capital markets, which of the following would we consider to be the opportunity cost of the forklift
?

• A) the additional revenue to the firm that the forklift would generate in the future
• B) the interest the firm could earn by purchasing a bond instead
• C) the purchase price of the forklift
• D) the resale value of the forklift after one year
• E) the future stream of MRPs from the forklift

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Definitions:

Physicians

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Free Black Americans

African Americans who were not enslaved and lived freely in the United States, especially significant before the Civil War in the context of a society divided by slavery.

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The process of increasing wealth, productivity, and standard of living within a society, often through developments in technology, education, and infrastructure.

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Land owned by the government, available for use or allocation to individuals or organizations.