Suppose that you are the president of a small printing company and you are considering the purchase of new machinery. What factors must you consider in making this decision?
What will be an ideal response?
You must first consider the expected flow of future productive services that the machinery will yield. The expected costs must be considered as well. These costs should include a look at the possible alternative uses of the funds required to purchase the machinery.
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The idea that investors today compare the returns on bonds with differing times to maturity to see which is expected to give them the highest return is the underlying principle behind the ________ of the term structure of interest rates
A) expectations theory B) investors' viewpoint analysis C) segmented-markets theory D) yield comparison theory
If fewer U.S. dollars are needed to buy a Swiss franc, then
a. Swiss goods become relatively more expensive to U.S. residents b. U.S. residents buy fewer francs c. U.S. goods become relatively cheaper to Swiss residents d. U.S. residents buy more Swiss goods e. U.S. residents supply more francs