A firm is considering an investment into a new technology that would lower costs and increase their profits over the foreseeable future. The technology costs $1 million today and will increase profits by $100 thousand per year. What is the minimum annual discount factor in which the firm is willing to make the investment? a. 0.95
b. 0.8
c. 0.9
d. 0.7

C. 0.9

Explanation:

From the question, we are given the information that the firm is investing $1 million and it's increasing profit by $100 thousand for every year, the return gotten will be:

= (100000/1000000 × 100)

= 0.1 × 100

= 10%

The discounting factor will be:

= 1 / (1 + interest rate)

= 1 / (1 + 0.1)

= 1 / 1.1

= 0.9

Therefore, the minimum annual discount factor in which the firm is willing to make the investment is 0.90.

answer; the coefficient of determination;

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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