1. WHAT IS THE MAXIMUM AMOUNT YOU WOULD PAY FOR AN ASSET THAT GENERATES AN INCOME OF $150 000 AT THE END OF EACH YEAR IF THE OPPORTUNITY COST OF USING THE FUND IS 9 PERCENT? (5 marks) 2.SUPPOSE THAT THE TOTAL BENEFIT AND TOTAL COST FROM AN ACTIVITY ARE RESPECTIVElY GIVEN BY THE FOLLOWING EQUATIONS: (15 marks) B(Q) = 150 280 - 502 C(Q) = 100 8Q NOTE:MB(Q) = 28 - 100 MC (Q) = 8 A. WRITE OUT THE EQUATION FOR THE NET BENEFIT. B. WHAT ARE THE NET BENEFIT WHEN Q = 1? AND WHEN Q = 5? C. WRITE OUT THE MARGINAL NET BENEFITS D. WHAT ARE THE MARGINAL NET BENEFIT WHEN Q= 1 AND WHEN Q = 5? D. WHAT ARE THE MARGINAL NET BENEFIT WHEN Q= 1 AND WHEN Q = 5? 3. A FIRM'S CURRENT PROFIT ARE $550,000. THESE PROFITS ARE EXPECTED TO GROW INDEFINITELY AT A CONSTANT RATE OF PERCENT. IF THE FIRM'S OPPORTUNITY COST OF FUND IS 8 PERCENT, DETERMINE THE VALUE OF THE FIRM. (10 MARKS) SECTION ESSAY PART B 4.INCOME ELASTICITY OF DEMAND VARIOUS APPLICATION. EXPLAIN EACH APPLICATION WITH THE HELP OF AN EXAMPLE. (30 marks) 5.EXPLAIN THE NATURE AND SCOPE OF the MANAGERIAL ECONOMIC (20 marks)