Suppose That an Economy Produces 300 Units of Output, Employing

question 200

Multiple Choice

Suppose that an economy produces 300 units of output, employing 50 units of input, and the price of the input is $9 per unit. The level of productivity and the per-unit cost of production are

• A) 1.50 and $6.00, respectively.
• B) 6 and $1.50, respectively.
• C) 5 and $6.00, respectively.
• D) 5 and $1.50, respectively.

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Definitions:

Discount Rate

The interest rate applied in determining the current valuation of future cash flows via discounted cash flow analysis.

Annual Cash Operating Costs

Annual Cash Operating Costs represent the total amount of money a business spends on operating activities during a year, excluding non-cash expenses.

Salvage Value

The projected value left in an asset after it has completed its useful life.

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.