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