An All-Equity Firm Is Analyzing a Potential Project Which Will

question 171

Multiple Choice

An all-equity firm is analyzing a potential project which will require an initial,after-tax cash outlay of $50,000 and after-tax cash inflows of $6,000 per year for 10 years.In addition,this project will have an after-tax salvage value of $10,000 at the end of Year 10.If the risk-free rate is 6 percent,the return on an average stock is 10 percent,and the beta of this project is 1.50,then what is the project's NPV?

• A) $13,210
• B) $4,905
• C) $7,121
• D) −$6,158
• E) −$12,879

Analyze the effects of demand curves on firm behavior in monopolistic competition.

Distinguish between the short-term and long-term equilibrium outcomes in monopolistic competition.

Evaluate the role and outcomes of economic profits in monopolistic competition.

Understand the basic concepts of monopolistic competition, including how firms compete on price and non-price factors.

---

Definitions:

Spongy Mesophyll

Layer of cells in a plant leaf's interior that aids in gas exchange and contains spaces between cells.

Gas Diffusion

The process by which gas molecules spread from areas of high concentration to areas of low concentration.

Photosynthesis

The process by which green plants, algae, and certain bacteria convert light energy, usually from the sun, into chemical energy stored in glucose.

Monocot Leaves

Leaves of monocotyledonous plants, typically characterized by parallel veins.