Economics Homework Help
You work for a large mineral exploration company and propose buying new state-of-the-art equipment. The equipment
You work for a large mineral exploration company and propose buying new state-of-the-art equipment. The equipment
is expensive and so is training employees to use it, but it will increase the yield of exploration activities in the future. The CEO of the company says that because your plan has high current costs it will depress the stock market value of the company. Does an investment that lowers current profit but increases future profit necessarily lower current stock prices? Explain briefly.
An investment that lowers current profit but increases future profit:
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