Question 1

The higher the interest rates

individuals do not place any importance on either current or future dollars

does not affect the investment strategy

the more value individuals place on current dollars

the more value individuals place on future dollars

Question 2

What is the net present value of a project that requires a $100 investment today and returns $50 at the end of the first year and $80 at the end of the second year?Assume a discount rate of 10%.Do you accept or reject the project?

Group of answer choices

a gain of $11.57. Accept the project because the gain is greater than zero.

a gain of $30. Reject the project because the gain is less than the cost.

a gain of $30. Accept the project because of the gain is greater than zero.

a gain of $11.57. Reject the project because the gain is less than the cost.

Question 3

You sell a product for $60.The fixed cost to produce is $5,000 per month, and your marginal cost of production is $50.How many do you need to sell in order to break even?

Group of answer choices

400

200

500

300

Question 4

You are considering opening a new business to sell dartboards.You estimate that your fixed costs equal $350,000, and your marginal cost of production will be $80.If you can sell dartboards for $100, what is your break even quantity?

Group of answer choices

4,375

17,500

1,000

3,500

Question 5

You manage a factory that has fixed costs of $4,000 per month and $2,000 in variable costs per month.You are contractually obligated to pay rent (your fixed cost) for the rest of the year.You produce 500 units of output per month, and you sell your product for $5.Because you are losing money each month (revenue = 500 x $5 = $2,500; costs = $4,000 + $2,000 = $6,000) your assistant manager suggests shutting down, at least for the rest of the year.To maximize profits (or minimize losses), you should

Group of answer choices

shut down immediately because the price of the good is less than your average total cost.

stay open, at least for the rest of the year, because price is greater than your average total cost.

shut down immediately because the price of the good is less than your average variable cost.

stay open, at least for the rest of the year, because price is greater than your average variable cost.