Tanner is choosing between two investment options. He can invest $500 now and get (guaranteed) $550 in one year, or invest $500 now and get (guaranteed) $531.40 back later today. The risk-free rate is 3.5%. Which investment should Tanner prefer?
A) $531.40 later today, since $1 today is worth more than $1 in one year.
B) $550 in one year, since it is $50 more than he invested rather than $31.40 more than he invested.
C) Neither - both investments have a negative NPV.
D) Tanner should be indifferent between the two investments, since both are equivalent to the same amount of cash today.
Answer: D
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A firm that is oriented toward procurement seeks to increase its productivity through all the following EXCEPT:
a. maximizing power over their suppliers b. improving quality c. reducing total cost of ownership d. cooperating with suppliers
Which of the following statements is correct?
a. Latin Americans use a buffer when delivering bad news. b. German letters tend to be informal. c. French letter endings tend to be rather formal. d. Japanese letters avoid bad news.