Suppose That the Output of the Machinery in a Factory

question 215

Multiple Choice

Suppose that the output of the machinery in a factory can be considered as a continuous income stream with an annual rate of flow at time t given by in thousands of dollars per year. If the annual interest rate is 4% compounded continuously, find the capital value of the machinery. Round your answer to the nearest dollar. ​

• A) $4,406,250
• B) $1,175,000
• C) $1,958,333
• D) $6,462,500
• E) $2,937,500

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Definitions:

Wage Rate

The standard amount of compensation given to employees per unit of time worked, often expressed as an hourly rate or annual salary.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good supplied.

Marginal Revenue Product Curve

A graph that shows the value of the additional output generated by employing one more unit of input, typically labor.

Complementary Factor

An input or product that, when used or consumed in combination with another, enhances the utility or value of the other.