What Annual Payment Must You Receive in Order to Earn

question 46

Multiple Choice

What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $1, 250?

• A) $77.19
• B) $81.25
• C) $85.31
• D) $89.58
• E) $94.06

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Definitions:

Quantity of Resources

The total amount of inputs available for the production process, including labor, capital, land, and raw materials.

Price-Taker Market

A market situation in which individual buyers or sellers have no influence on the price of a product, often due to the product being completely standardized and numerous participants.

Tea Industry

The sector of the economy devoted to the production, processing, and marketing of tea.