If Andre Preneur puts together a company that yields a profit of 40,000 per year and this profit stream is expected to continue indefinitely, what price can he sell the company for if the discount rate equals 8 percent?
a. 40,000
b. 60,000
c. 100,000
d. 250,000
e. 500,000
Question 2
The U.S. demand curve for foreign currency is drawn holding constant all except one of the following factors. Which is the exception?
a. income in the United States
b. the inflation rate in the United States
c. incomes in the rest of the world
d. the interest rate in the United States relative to the rest of the world
e. tastes and preferences of Americans for foreign goods
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