JCB (Which makes agricultural and construction equipment) has the opportunity to purchase a new factory today that will provide them with a Rs50 million return four years from now If prevailing interest rates are 6 percent, what is the maximum that the project can cost for JCB to be willing to undertake the project ?

Related Mcqs:

1. Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The accounting profit at Naila’s pottery factory is ?

   A. Rs30,000
   B. Rs35,000
   C. Rs75,000
   D. Rs70,000

2. Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The economics profit at Naila’s pottery factory is ?

   A. Rs80,000
   B. Rs30,000
   C. Rs75,000
   D. Rs70,000

3. If a firm were to bid to do a turnkey operation where they would choose a building site designing a cement factory to build the plant hire construction crews assemble materials and equipment to run the new factory and turn over the finished factory ready to operate to the owners the firm would be using which of the following ?

   A. Core Process products selling
   B. Design Products selling
   C. Reciprocal spelling
   D. Systems selling

4. Suppose there are three identical vases available to be purchased. Buyer 1 is willing to pay Rs30 for one, buyer 2 is willing to pay Rs25 for one, and buyer 3 is willing to pay Rs20 for one. If the price is Rs25, how many vases will be sold and what is the value of consumer surplus in this market ?

   A. Three vases will be sold, and consumer surplus is Rs80
   B. One vase will be sold, and consumer surplus is Rs5.
   C. One vase will be sold, and consumer surplus is Rs30.
   D. Three vases will be sold, and consumer surplus is Rs0.
   E. Two vases will be sold, and consumer surplus is Rs5.

5. For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?

   A. the United States to Switzerland causing the dollar to depreciate
   B. the United States to Switzerland causing the dollar to appreciate
   C. Switzerland to the United States causing the franc to depreciate
   D. Switzerland to the United States causing the franc to appreciate

6. For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?

   A. The United States to Japan causing the dollar to depreciate
   B. The United States to Japan causing the dollar to appreciate
   C. The Japan to United States, causing the dollar to depreciate
   D. The Japan to United States, causing the dollar to appreciate

7. The amount today that would be needed, at prevailing interest rates, to produce a particular sum in the future is known as ?

   A. future value
   B. fair value
   C. present value
   D. compound value
   E. beginning value

8. Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero marginal cost of study production. If ABC publishing engages in tying the two products its best strategy is to charge a combined price of ?

   A. Rs 60
   B. Rs 90
   C. Rs 85
   D. Rs 75

9. Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero-marginal cost of study production. If ABC publishing charges separate price for both products its best strategy is to charge price that when combined, total ?

   A. Rs 85
   B. Rs 75
   C. Rs 80
   D. Rs 60

10. Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?

    A. currency arbitrage
    B. interest arbitrage
    C. short positions
    D. long positions