A Firm Has 100 Computers, and Each Year 5 of Them

question 125

Multiple Choice

A firm has 100 computers, and each year 5 of them become obsolete and must be recycled. This firm is in a steady state if investment each year is equal to

• A) 0.
• B) 5.
• C) 1.
• D) 100.
• E) 95.

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Definitions:

Borrower

An individual or organization that takes something, especially money, from another with the intention of returning it or its equivalent.

Angel Investor

An individual who provides capital to start-up companies in exchange for ownership equity or convertible debt.

Divestiture

The process of a company selling off or liquidating a portion of its business or assets, often for strategic, legal, or financial reasons.

Time Warner

A major multinational media and entertainment conglomerate, known for producing film, television, and entertainment content.