Answer the following statements true (T) or false (F)
1) Operating profits omit interest payments.
2) When the maximum amount of interest is paid on a loan, the present value of the cost of the investment exceeds the initial cost of the investment.
3) Salvage values are strictly positive.
4) When a firm uses its own funds to self-finance an investment, the operating profit exceeds the taxable profit.
5) Financing an investment with debt increases the net present value of the investment.
1) TRUE
2) FALSE
3) FALSE
4) FALSE
5) TRUE
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Refer to Figure 12-16. Which panel best represents the perfectly competitive organic produce market in which some firms are experiencing short-run losses, and consumers are displaying an increased preference for organic produce?
A) Panel A B) Panel B C) Panel C D) Panel D
A common characteristic of oligopolies is:
a. interdependence in pricing decisions. b. independent pricing decisions. c. low industry concentration. d. few or no plant-level economies of scale.