Thane of your sonbal leammates are offered the chance to buy a pool hall. Each partner would put up $50,000. The revenues from the operation of the pool hall have been steady at $125,000 year for several years and are projected to remain steady into the future. The costs (not including opportunity costs) of operating the pool hall (including maintenance and repair, depreciation, and salaries) have also been steady at $50,000 per year. Currently, 5-year Treasury bills are yielding 3.5 percent interest Would you go in on the deal? Explain your answe OA. Yes, the expected rate of retum exceeds that of the opportunity cost of your money OB Yes, revenues exceed operating costs. OC. No, you could make more by investing your money in Treasury bills OD. No, operating costs exceed revenues
Thane of your sonbal leammates are offered the chance to buy a pool hall. Each partner would put up $50,000. The revenues from the operation of the pool hall have been steady at $125,000 year for several years and are projected to remain steady into the future. The costs (not including opportunity costs) of operating the pool hall (including maintenance and repair, depreciation, and salaries) have also been steady at $50,000 per year. Currently, 5-year Treasury bills are yielding 3.5 percent interest Would you go in on the deal? Explain your answe OA. Yes, the expected rate of retum exceeds that of the opportunity cost of your money OB Yes, revenues exceed operating costs. OC. No, you could make more by investing your money in Treasury bills OD. No, operating costs exceed revenues
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You and nine of your softball teammates are offered the chance to buy a pool hall. Each partner would put up $50,000. The revenues from the operation of the pool hall have been steady at $125,000 per
year for several years and are projected to remain steady into the future. The costs (not including opportunity costs) of operating the pool hall (including maintenance and repair, depreciation, and salaries)
have also been steady at $50,000 per year. Currently, 5-year Treasury bills are yielding 3.5 percent interest
Would you go in on the deal? Explain your answe
OA. Yes, the expected rate of retum exceeds that of the opportunity cost of your money
OB. Yes, revenues exceed operating costs.
OC. No, you could make more by investing your money in Treasury bills
OD. No, operating costs exceed revenues.
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