Author Question: A builder is planning to construct to a departmental store with an investment worth 1,200 . He ... (Read 77 times)

olgavictoria · **on:** Jun 30, 2018

A builder is planning to construct to a departmental store with an investment worth 1,200 . He receives proposals from two retailers interested to lease space in it assuring him future cash flows worth 1,000 at the end of the first year and 700 at the end of two years. If the building lasts only for two years and the discount rate is 15 percent, what would be the net present value of this project?
a. 300.50
b. 257.63
c. 198.67
d. 118.38

Question 2

If demand is perfectly elastic,
A) the smallest increase in price will cause quantity demanded to fall to zero.
B) the smallest increase in price will cause demand to fall to zero.
C) the smallest increase in price will cause quantity demanded to fall.
D) the smallest increase in price will cause demand to fall.