Froeb et al.’ s Chapter 4: a. Individual problems: 4-5 and 4-6.
Discussion Question 9: How is the concept of a normal return on investment related to the distinction between business and economic profit?
Problem 6: Determine which of the two investment projects of Problem 5 the manager should choose if the discount rate of the firm is 20 percent.
Problem 9: A woman managing a photocopying establishment for $ 25,000 per year decides to open her own duplicating place. Her revenue during the first year of operations is $ 120,000 and her expenses are as follows:
Salaries to hired help 45,000 Supplies 15,000 Rent 10,000 Utilities 1,000 Interest on bank loan 10,000