When a firm makes plans for investments in physical capital, it compares the _______________ on these investments with ______________________ .
A. projected rates of return; the cost of financial capital to the firm
B. present inputs of physical capital; future hurdle rates
C. present inputs of physical capita; future marginal revenue product
D. projected rates of return; the competitive pressures for labor
Answer:A
When a firm makes plans for investments in physical capital, it compares the _______________ on these investments with ______________________ .
A. projected rates of return; the cost of financial capital to the firm B. present inputs of physical capital; future hurdle rates C. present inputs of physical capita; future marginal revenue product D. projected rates of return; the competitive pressures for labor
Explanation: 66. The table below sets out the amount of capital needed for certain investment projects and the rate of return for each project. What is this firm’s demand for physical capital if their hurdle rate is 5%?