The Minimum Required Rate of Return Is the Discount Rate

question 247

True/False

The minimum required rate of return is the discount rate that makes the net present value of the project equal to zero.

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Definitions:

Short Run

A period in economics where at least one factor of production is fixed, limiting the adjustments a firm or industry can make.

Inputs

Resources such as labor, materials, and capital that are used in the production process to create goods and services.

Output

The total amount of goods or services produced by an individual, firm, or country over a specific period.

Marginal Product

The additional output that is produced by using one more unit of a particular input, while keeping other inputs constant.