Firms undertake investments (select the wrong option).
A) If they think it is going to generate profits;
B) If profits are likely to pay for the explicit and implicit cost of using capital;
C) If firms have access to capital;
D) If the NPV expected is less than zero;
E) If the country has good investments policies (i.e. tax break, concessions, etc.);
Talking about NPV, sums received in the distant future:
are affected by interest rate by like sums received in the near future
are considered less risky
are less affected by interest rate than sums received in the near future
are less vulnerable to adverse interest rate changes
are more affected by interest rate than sums received in the near future
Investment consists of adding capital (equipment, buildings, and intangible assets) to that already available in the country and is therefore also known as “Gross Capital Formation” or Gross Investment.
Gross Investment is the sum of the Gross Public Investment (Government Investment) and of the Gross Private Investment.
The value of the capital of a country, like that of a firm, continuously decreases due to wear, obsolescence and accidents – that is, so-called depreciation.
When we subtract depreciation from gross investment we obtain net investment
The measurement of depreciation is always very precise and objective.
Comment by gustavorinaldi
August 23, 2023 @ 4:00 pm
GustavoRinaldi's Academic Site
Firms undertake investments (select the wrong option).
Comment by Marco M. May 5, 2020 @ 10:00 pmA) If they think it is going to generate profits;
B) If profits are likely to pay for the explicit and implicit cost of using capital;
C) If firms have access to capital;
D) If the NPV expected is less than zero;
E) If the country has good investments policies (i.e. tax break, concessions, etc.);
ok
Comment by gustavorinaldi May 24, 2020 @ 5:13 pmTalking about NPV, sums received in the distant future:
Comment by gustavorinaldi June 18, 2023 @ 1:34 pmare affected by interest rate by like sums received in the near future
are considered less risky
are less affected by interest rate than sums received in the near future
are less vulnerable to adverse interest rate changes
are more affected by interest rate than sums received in the near future
Look for the wrong:
While consumption is a relatively stable part of total demand, investment is its most variable component.
Investment is also the process by which the capital of a nation diminishes.
Investment provides workers with better equipment and makes them more productive.
Investment fosters growth of workers’ productivity, creating an opportunity for increasing their salaries.
Thanks to investment production can grow and prices can remain stable.
Comment by gustavorinaldi August 23, 2023 @ 3:46 pmLook for the wrong
Investment consists of adding capital (equipment, buildings, and intangible assets) to that already available in the country and is therefore also known as “Gross Capital Formation” or Gross Investment.
Gross Investment is the sum of the Gross Public Investment (Government Investment) and of the Gross Private Investment.
The value of the capital of a country, like that of a firm, continuously decreases due to wear, obsolescence and accidents – that is, so-called depreciation.
When we subtract depreciation from gross investment we obtain net investment
The measurement of depreciation is always very precise and objective.
Comment by gustavorinaldi August 23, 2023 @ 4:00 pm