If all poor families had the same income and no more than 4 ...

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If all poor families had the same income and no more than 4 persons, nearly one-eighth of the nonaged poor would no longer be counted as poor.
 
  Indicate whether the statement is true or false

Question 2

Ed's Electronic Devices has an asset beta of 1.2. The market rate of return is 12 and the risk-free rate of return is 2. Ed is considering updating his production technology.
 
  If he does so, he expects the cash streams indicated in the table below. Given this information, should Ed update his production technology? Year Cashflow Present Value 0 -100,000 1 25,000 2 25,000 3 25,000 4 25,000 5 25,000 6 25,000 Total

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Answer to Question 1

T

Answer to Question 2

The present value of the cash flow is given in the table below. As indicated in the table, the net present value of the cash flow is negative. This implies that Ed should not update his production technology.

Year Cash Flow Present Value
0 -100,000 -100,000
1 25,000 21,929.824
2 25,000 19,236.688
3 25,000 16,874.287
4 25,000 14,802.007
5 25,000 12,984.217
6 25,000 11,389.664
Total -2,783.32