Assume the Following: (1) the Real Cost of a Unit

question 52

Multiple Choice

Assume the following: (1) the real cost of a unit of capital is one; (2) the unit of capital is expected to increase a firm's real profit by $10,000 each year, and depreciate by 10% each year; and (3) the real interest rate is 2%. What is the "user cost" or "rental cost" of this unit of capital?

• A) 0.09.
• B) 0.03.
• C) 0.12.
• D) 0.15.
• E) 0.18.

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Definitions:

Birth Date

The specific day on which a person was born, usually including day, month, and year.

Working Memory

The structure of memory that can hold a sensory stimulus for up to 30 seconds after the trace decays. Also called short-term memory.

Assimilation

The process of absorbing new information into one's existing cognitive schemas, or the integration of individuals into a different cultural or societal group.

Nonadaptive

Describes traits or behaviors that do not provide a survival or reproductive advantage in a given environment.