Suppose That Adding a New Disc Drive to Your Computer

question 47

Multiple Choice

Suppose that adding a new disc drive to your computer increases its value by $100.The disc drive costs $75 and takes you 2 hours to install.If you value your time at $6 per hour then the net benefit of installing the disc drive is:

• A) $13.
• B) $19.
• C) $25.
• D) $88.

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Definitions:

Government Spending

The total amount of public sector expenditure on goods and services, including salaries, defense, and welfare programs.

Gross Domestic Product

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Operating Leverage

The degree to which a firm relies on fixed costs in its operations, affecting its potential income variability.

Financial Leverage

The use of borrowed money to increase the potential return of an investment.