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1 Consider the goods market model where consumption is given by: C = c0 + c1(Y-T), investments given by I = b0 + b1Y-b2i, and G and T are given

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1 Consider the goods market model where consumption is given by: C = c₀ + c₁(Y-T), investments given by I = b₀ + b₁Y-b₂i, and G and T are given. Assuming c₀ = 100, c₁ = 0.6, b₀ = 150, b₁ = 0.2 and b₂ = 1000. Keeping all other things constant, what will be the change in the equilibrium investment (I*) in the goods market if autonomous consumption, c0, is increased by $10?

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Suppose we have 5 mutually exclusive projects, A,B,C,D and E, whose IRR on incremental investment between projects is given as in the following table. (For example IRRIA-B)=11%. IRR(B-D)=8%). Which project should be selected at MARR=10%, please sort the projects. D E 11% 13% 12% 18% 13% 8% 12% 9% 11% 12% A A B ? IC ? D E Select one: a. A>B>D>E>C b. A>D>B>C>E OC. A>B>D>C>E d. A>D>B>E>C e. D>E>C>A>B f.B>D>E>CA