Marginal utility:
1 answer:
Answer:
a. is the change in total satisfaction derived from consuming one more unit of a good.
Explanation:
Marginal utility: It defines as changes in total satisfaction of consumers with one additional unit changes in the consumption of goods. It derives satisfaction level of consumer with the units of goods consumed, similarly usage of product changes with the number of the product we have in stock or purchased.
Formula; Marginal utility=
There are several types of marginal utility:
- Zero marginal utility.
- Positive marginal utility.
- Negative marginal utility.
- Increasing marginal utility.
- Diminishing marginal utility.
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The present value of the cash flows is 51020.41
<h3>What is Compound Interest?</h3>Compound interest, often known as interest on principal and interest, is the adding of interest to the loan or deposit principal. It occurs when interest is reinvested, added to the lent capital instead of being paid out, or the borrower is required to pay it, resulting in the next period's interest being generated on the principal amount plus any accumulated interest.
In the question it is given that:
Equipment cost $45,000.
first year's cash flow was $25,000
second-year cash flow $30000
5% interest is charged.
We are aware that the following relationship can be used to calculate the present value.
PV stands for present value, Future Value is FV, and the rate of interest is r.
Consequently, the present value is calculated as
⇒ PV = 51020.41
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