The Manufacture of Folic Acid Is a Competitive Business

question 4

Multiple Choice

The manufacture of folic acid is a competitive business. A new plant costs $100,000 and lasts for three years. The cash flow from the plant is as follows: year 1: +$43,300; year 2: +$43,300; and year 3: +$58,300. (Assume no taxes.) If the salvage value at the end of year 2 is $40,000, would you scrap the plant at the end of year 2?

• A)Yes
• B)No
• C)I don't know.
• D)More information is needed.

---

Definitions:

Measure

A method or tool used to assess, quantify, or evaluate something, often used in analyzing performance or outcomes.

Short-lived

Lasting for only a brief period.

Emotions

Complex psychological states involving physiological arousal, expressive behaviors, and conscious experience.

Outgroup

A group of people perceived as distinctly different from or outside of one's own in-group, often leading to biases or discrimination.