September 25, 2003

Investment Decisions

Today, we used investment in college to discuss the typical investment decision facing firms.

The present value of the benefits is not as large as the present value of the costs for the parameters in our example.


Turning to real interest rates, assuming the benefits go up with inflation, rescues our decision to go to college.


The inflation assumption has a big effect on the calculations.


Posted by bparke at September 25, 2003 04:49 PM