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The Present Value of a Firm's Earnings Over Two Periods

question 8

Multiple Choice

The present value of a firm's earnings over two periods is equal to its earnings in the initial period plus the ________ value of its earnings in the next period, and will ________ as the interest rate rises.


Definitions:

Marginal Products

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

Exponents

mathematical operations denoting how many times a number, the base, is multiplied by itself.

Marginal Products

The increase in output resulting from a one-unit increase in the quantity of a single input, keeping others constant.

Exponents

Mathematical notation indicating the number of times a number (the base) is multiplied by itself.

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