As an Excellent Student in Environmental Ecology You Have Been

question 17

Multiple Choice

As an excellent student in environmental ecology you have been awarded the "Clean Effluent Prize" by state agency. You (or your estate) are to receive $300 forever from the state or the agency will allow you to choose $400 over the next 25 years. Payments are to be received semi-annually and if the market rate of interest is 6% what is the value of the two options respectively?

• A) $30,000; $10,000.25
• B) $5,000; $5,145.95
• C) $10,000; $6,304.74
• D) $2,500; $3,859.46
• E) $6,666.67; $5,113.34

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Definitions:

Soybeans Market

The economic market that deals with the buying and selling of soybeans, including its derivatives and products.

Economic Profits

The margin found by reducing total revenue by the sum of clear and concealed costs.

Market Price

The present price at which a service or asset is available for purchase or sale in the open market.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing excess earnings over the normal rate of return.