When Comparing Two Projects with Different Lives, Why Do You

question 112

Multiple Choice

When comparing two projects with different lives, why do you compute an annuity with an equivalent present value (PV) to the net present value (NPV) ?

• A) so that you can see which project has the greatest net present value (NPV)
• B) so that the projects can be compared on their cost or value created per year
• C) to reduce the danger that changes in the estimate of the discount rate will lead to choosing the project with a shorter timeframe
• D) to ensure that cash flows from the project with a longer life that occur after the project with the shorter life has ended are considered

Identify how market dynamics in monopolistic competition lead to zero economic profit in the long run.

Determine the markup over marginal cost in the context of monopolistic competition.

Evaluate the implications of excess capacity in monopolistically competitive firms.

Analyze the impact of government interventions on firm output and efficiency in monopolistically competitive markets.

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Definitions:

Java.awt

A package in Java that contains classes for creating graphical user interfaces and for painting graphics and images.

Java.lang

The fundamental package in the Java programming language that provides classes that are essential to the design of the Java programming language.

Implements

A keyword in Java used by classes to specify that they will provide implementations for the methods defined in an interface.

Interface

In programming, an interface is a reference type that defines a set of abstract methods that a class must implement.