Comment on the following statement: "Capital investment decisions always involve risk."
What will be an ideal response?
The statement is true. When firms make capital investment decisions, they must do so based on expectations about the future. Therefore, because the future is uncertain, these decisions will always involve some amount of risk.
Economics
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Suppose 80% of U.S. trade is with England and the rest is with Japan. If the dollar rises by 10% against the pound and rises by 20% against the yen, what is the percentage change in the effective exchange rate of the United States?
a. -16% b. -12% c. -8% d. -4%
Economics
The above figure shows supply and demand curves for milk. If the government passes a $2 per gallon specific tax, the loss in producer surplus will equal
A) b + c + f + g. B) f + g. C) b + f. D) c + g.
Economics