Answer to Question #266447 in Microeconomics for William

Question

Q1. What is the meaning of Present worth of an investment proposal?

(i) It is the present value of the principal investment.

(ii) It is the future value of principal investment.

(iii) It is the annual return of an investment proposal.

(iv) None of these.

Q2. What is the meaning of Future worth of an investment proposal?

(i) The future value of a principal investment.

(ii) The annual return.

(iii) The life of an investment proposal

(iv) None of these.

Q3. What is the meaning of a mutually exclusive investment proposals?

(i) A set of investment proposal with equal return.

(ii) A set of investment proposal with equal life.

(iii) A set of investment proposal with equal principal investment.

(iv) None of these.

Q4. What is the meaning of Annual Equivalent Worth of an investment proposal?

(i) It is the annual equivalent amount of cost.

(ii) It is the annual equivalent amount of revenue.

(iii) It is the annual equivalent amount of principal investment.

(iv) It is the net of annual equivalent amount of cost and revenue.

Answer 1

Q1)It is the present value of the principal investment.

Q2)The future value of a principal investment.

Q3)None of these. Because mutually exclusive investment proposals are proposals such that acceptance of one will automatically lead to rejection of the other, and they happen to directly compete with each other.

Q4) It is the net of annual equivalent amount of cost and revenue.