D) buy the tractor. Answer: C Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical AACSB: Analytic Skills Learning Outcome: Micro-18 16) Refer to Table 11.2. If the interest rate is 13%, then the farmer will engage in investment of A) $500,000. B) $600,000. C) $700,000. D) $1,100,000. Answer: A Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical Analytic Skills Learning Outcome: Micro-18 17) Refer to Table 11.2. When the interest rate ________, the farmer will engage in no investment. A) is greater than 15% B) is less than 5% C) is less than 15% D) is greater than 5% Answer: A Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical AACSB: Analytic Skills Learning Outcome: Micro-18 7) Assume the current interest rate is 25%. The present value of $1,000 in one year would be A) $180. B) $450. C) $750. D) $800. Answer: D Diff: 2 Topic: Appendix: Calculating Present Value
D) buy the tractor. Answer: C Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical AACSB: Analytic Skills Learning Outcome: Micro-18 16) Refer to Table 11.2. If the interest rate is 13%, then the farmer will engage in investment of A) $500,000. B) $600,000. C) $700,000. D) $1,100,000. Answer: A Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical Analytic Skills Learning Outcome: Micro-18 17) Refer to Table 11.2. When the interest rate ________, the farmer will engage in no investment. A) is greater than 15% B) is less than 5% C) is less than 15% D) is greater than 5% Answer: A Diff: 2 Topic: The Demand for New Capital and the Investment Decision Skill: Analytical AACSB: Analytic Skills Learning Outcome: Micro-18 7) Assume the current interest rate is 25%. The present value of $1,000 in one year would be A) $180. B) $450. C) $750. D) $800. Answer: D Diff: 2 Topic: Appendix: Calculating Present Value
ch11_input-demand_the-capital-market-and-the-investment-decision.docx