Answer:
The project is worth $2,738.57.
Explanation:
Giving the following information:
You have been offered a project paying $300 at the beginning of each year for the next 20 years. The rate of return is 9%.
To calculate the present value, first, we need to calculate the final value:
FV= {A*[(1+i)^n-1]}/i
A= annual pay= 300
n= 20
i= 0.09
FV= {300*[(1.09^20)-1]}/0.09
FV= $15,348.06
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 15,348.06/1.09^20= $2,738.57
Answer:
if business owners want to maximize the value of the company, they should invest in projects that have the greatest value added.
Answer:
A. Is self regulating
Explanation:
The fundamental theory of the classical economy is that the market economy is self regulating. The classical economists believe that an economy is always capable of achieving real GDP, that is GDP when resources are fully employed. And that, time to time, when GDP falls below or exceed the real GDP, the market economy has self-adjustment mechanisms to bring it back to the real GDP level. Classical economists believes in self regulating democracies and capitalistic market developments.
The answer is: <span>cyclical because jobs are lost in many industries as they cut production
when the economy goes into recession, most people will have lower purchasing power which will force them to buy less products.
This situation will force companies to lower the amount of supply that they give to the market, which will lead to them cutting off several employees in order to maintain financial stability.</span>
