The internal rate of return on some project is defined as the rate of interest that a. makes the NPV of the project equal to zero b. makes the nominal return on the project equal to the real return c. compounds the interest rate d. makes the duration of the project equal to zero e. makes the equivalent annual cost of the project equal to its compounded rate

The internal rate of return on some project is defined as the rate of interest that a. makes the NPV of the project equal to zero b. makes the nominal return on the project equal to the real return c. compounds the interest rate d. makes the duration of the project equal to zero e. makes the equivalent annual cost of the project equal to its compounded rate

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 3E

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Consider the following production and cost functionsq=〖(10K^(2/5)+5L^(2/5))〗^(5/2)1250=20K+8LWhich implies〖MP〗_K=10〖(10K^(2/5)+5L^(2/5))〗^(3/2) K^(-3/5)〖MP〗_L=5〖(10K^(2/5)+5L^(2/5))〗^(3/2) L^(-3/5)What is the profit maximizing combination of K and L?