Suppose that a firm can invest 100 today in a project and receive 105 a year from today. There is no inflation, and the annual interest rate in the economy is 6. The firm should
A) invest in the project because the opportunity cost is greater than the return on the investment.
B) not invest in the project because the opportunity cost is greater than the return on the investment.
C) invest in the project because the opportunity cost is less than the return on the investment.
D) invest in the project because the opportunity cost is the same as the return on the investment.
Question 2
The information in the above table gives the 2000 base period market basket and prices used to construct the CPI for a small nation. The table also has 2010 prices. What is the value of the CPI for the base period 2000?
A) 140 B) 100 C) 30 D) 75 E) 133
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