Suppose That a Firm Generates $40,000 of Profit Per Year

question 83

Multiple Choice

Suppose that a firm generates $40,000 of profit per year, and this profit will continue forever. At a 10% interest rate, what is the present discounted value of the firm's profit?

• A) $400,000
• B) $4 million
• C) $4.4 million
• D) $360,000

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Definitions:

Population Size

The total number of individuals within a specific species or group living in a particular geographical area.

Births

The act or process of giving birth; the emergence of a new individual from its mother's womb.

Deaths

The cessation of all biological functions that sustain a living organism.

Lesson From Nature

Insights or knowledge gained from observing natural processes, which can inform human practices and technologies.