Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for 250,000 a year. He pays his farm hands 28,000 a year.
Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.
Question 2
What is the present value of 1,000 to be received 2 years in the future with an interest rate of 8 percent?
A) 857.34
B) 925.93
C) 1080.00
D) 1166.40