Scenario 19-1 Ferris B., a Student at a Community College, Is Considering

question 345

Multiple Choice

Scenario 19-1
Ferris B., a student at a community college, is considering what he should do for summer employment. Two recruiters show up at his school in search of summer workers. Recruiter A is looking for lifeguards to patrol the beach at an exclusive island resort in the Caribbean. Recruiter B is looking for workers to staff positions at a summer youth camp.
-Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter presents. On the basis of knowledge obtained in his economics class, Ferris concludes that

• A)the lifeguard job will be more fun than the summer camp job, so the wage for that job will be higher than otherwise.
• B)if the summer camp job doesn't require any special skills, the wage for that job will be lower than otherwise.
• C)since the summer camp job requires some night shift work, the wage for that job will be lower than otherwise.
• D)All of the above are correct.

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Definitions:

Share Of Stock

Represents ownership in a corporation, giving the holder a claim on part of the company’s assets and earnings.

Discount Rate

The financial rate used to convert future cash flows into their present value during a discounted cash flow analysis.

Cash Flows

The overall volume of cash inflows and outflows within a firm, influencing its liquid assets.

Present Value

The value at present of money or cash flows expected in the future, discounted at a particular rate of return.