Use the Information Below to Answer the Following Questions

question 104

Multiple Choice

Use the information below to answer the following questions.
Fact 18.5.1
The Burning Belly Taco Stand is considering buying some new special ovens. Each oven will cost $1,000, and will last for 2 years before it wears out. The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos, and will generate a value of marginal product of $600 for the first oven, $570 for the second oven, and $530 for the third oven. (Assume all revenues are earned at the end of the year.)
-Consider Fact 18.5.1. If the rate of interest is 10 percent, how many ovens will the Burning Belly Taco Stand buy?

• A)zero
• B)1
• C)2
• D)3
• E)insufficient information to answer

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing money or the return on invested savings.

Interest Rate

The cost of borrowing money or the return on investment, typically expressed as a percentage of the sum borrowed or invested per year.

Undertake Project

To begin or commit to a planned series of actions or tasks.

Present Discounted Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return or discount rate.