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You and nine of your softball teammates are offered the chance to buy a pool hall. Each partner would put up $50, 000. The revenues
You and nine of your softball teammates are offered the chance to buy a pool hall. Each partner would put up $50, 000. The revenues from the operation of the pool hall have been steady at $125, 000 per year for several years and are projected to remain steady into the future. The costs (not including opportunity costs) of operating the pool hall (including maintenance and repair, depreciation, and salaries) have been steady at $50, 000 per year. Currently, 5-year Treasury bills are yielding 1.5 percent interest. Would you go in on the deaf? Explain your answer. Yes, revenues exceed operating costs. Yes, the expected rate of return exceeds that of the opportunity cost of your money. No, operating costs exceed revenues. No, you could make more by investing your money in Treasury bills
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