Present Value Factor for Reversion of $1 -Using Only the Information in the Table Above, What Would

question 15

Multiple Choice

Present Value Factor for Reversion of $1
$\begin{array}{cccccc}\text { Perlod } & 6 \% & 7 \% & 8 \% & 9 \% & 10 \% \\\hline 1 & .943396 & .934579 & .925926 & .917431 & .909091 \\2 & .889996 & .873439 & .857339 & .841680 & .826446 \\3 & .839619 & .816298 & .793832 & .772183 & .751315 \\4 & .792094 & .762895 & .713503 & .708425 & .683013 \\5 & .747258 & .712986 & .680583 & .644931 & .620921 \\6 & .704961 & .666643 & .630170 & .596267 & .564474\end{array}$
-Using only the information in the table above, what would the IRR be for an investment that cost $500 in period 0 and was sold for $750 in period 5?

• A) Between 6% and 7%
• B) Between 7% and 8%
• C) Between 8% and 9%
• D) Between 9% and 10%

Understand the concept of diminishing returns and how it impacts marginal cost and benefit curves.

Understand how external factors such as technology and consumer preferences can shift marginal cost and marginal benefit curves.

Grasp the Coase theorem and its application to solving externalities.

Understand the law of diminishing marginal utility and its impact on marginal benefit curves.

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