Net present value method

am express inc. is considering the purchase of an additional delivery vehicle for $55,000 on january 1, 2014. the truck is expected to have a five-year life with an expected residual value of $15,000 at the end of five years. the expected additional revenues from the added delivery capacity are anticipated to be $58,000 per year for each of the next five years. a driver will cost $42,000 in 2014, with an expected annual salary increase of $1,000 for each year thereafter. the annual operating costs for the truck are estimated to be $3,000 per year.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

these are the four factors that influence enterpreneurship development

1. economic development

2. culture

3.technological development

4. education

answer; only identify and interpret trends in the marketplace;

the amount of money you earn by working is your income.

the percentage of people actively looking for a job is called unemployment.