You Are Thinking About Investing in a Mine That Will

question 55

Multiple Choice

You are thinking about investing in a mine that will produce $10,000 worth of ore in the first year.As the ore closest to the surface is removed it will become more difficult to extract the ore.Therefore,the value of the ore that you mine will decline at a rate of 8% per year forever.If the appropriate interest rate is 6%,then the value of this mining operation is closest to:

• A)$71,429.
• B)$500,000.
• C)$166,667.
• D)This problem cannot be solved.

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Definitions:

Theory of Work Adjustment

A psychological theory explaining how workers adjust to their jobs by balancing their abilities with job demands and their needs with job rewards.

Celerity

The quality of being quick or prompt; swiftness of action or motion.

Endurance

Sustaining of interaction with the environment.

Minnesota Importance Questionnaire

A psychological assessment tool designed to measure an individual's work values and importance placed on various aspects of work.