Suppose you own property containing a small vein of copper ore. By mining and selling the copper today, you could get net benefits of $4.00 per pound. Alternatively, you could wait for one year and get net benefits at that time of $4.10 per pound. If the interest rate is 5%, you should:

A) mine the copper next year, since the market price may go up even further
B) mine the copper next year, since $4.10 exceeds $4.00
C) mine the copper today, since the present value of $4.10 received next year exceeds $4.00
D) mine the copper today, since $4.00 today could be invested and return $4.20 next year

Answer rating: 100% (QA)

D mine the copper today since 400 today could be invested ... View the full answer