A software company decided to build a larger factory at a cost of $50 million that would be operational for 5 years. At the end of five years the factory would become obsolete and could not be sold used. The company would borrow the money from the loanable funds market at 7% interest. Assume the decisions by the company were made rationally in the interest of the firm.Which of the following statements are true or false. Why?
Part IISeveral years after the factory was in place more production workers were hired to help fulfill an unusually larger than expected demand for its software. They would hire labor from the region at $10 per hour. Which of the following statements are true or false. Why?