If the Increase Income from Sale of a Nonrenewable Resource

question 86

Multiple Choice

If the increase income from sale of a nonrenewable resource in the current period is equal to the present value of income sale of the resource in the next period, the owner should:

• A)sell all of the resource in the next period.
• B)sell some of the resource now and some in the next period.
• C)sell all of the resource now.
• D)wait to see what will happen in the future.

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Definitions:

Months

Units of time, each roughly equivalent to one twelfth of a year, used in planning and organizing.

Rate Of Interest

The percentage of the principal that will be charged for a particular period of time, normally one year.

Interest

The charge for borrowing money or the return on deposited funds, typically expressed as a percentage rate over a period of time.

Simple Annual Interest Rate

The percentage of the principal amount that will be charged or earned as interest, calculated once per year without compounding.