When costs occur in the future, the ________ the costs occurs, the ________ it is discounted and the ________ negative effect it has on the net present value.
A) sooner; less; larger ;
B) later; more; smaller
C) sooner; more; smaller
D) later; more; larger
B) later; more; smaller
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Because they combine high yield and high risk, junk bonds
A) should never be considered sound investments. B) may increase the overall yield of a portfolio containing stocks without an undue increase in risk. C) should be purchased only by risk lovers. D) None of the above.
Which of the following is the best example of an action that imposes an external cost?
A. Wear and tear on your car as the result of frequent use. B. Deterioration in the average quality of a house you own as the result of poor maintenance. C. Water pollution from an upstream factory that increases the cost of providing clean water to downstream residents. D. A rose garden on your property from which your neighbor gets much enjoyment.