The Bid Price Always Assumes Which One of the Following

question 1

Multiple Choice

The bid price always assumes which one of the following?

• A) A project has a one-year life.
• B) The aftertax net income of the project is zero.
• C) The net present value of the project is zero.
• D) Any assets purchased will have a positive salvage value at the end of the project.
• E) Assets will be depreciated based on MACRS.

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Definitions:

Production Possibilities

The various combinations of goods and services that can be produced within an economy when all resources are fully utilized.

Capital Goods

Long-term assets used by businesses to produce goods and services, such as machinery and buildings.

Consumer Goods

Items produced for direct consumption by the end consumer.

Production Possibilities Curve

An illustrative chart that depicts the optimal mix of two goods or services that can be produced by an economy when it fully and efficiently employs all available resources.