B Com Exam > B Com Questions > What does the Marginal Efficiency of Capital ...
Start Learning for Free
What does the Marginal Efficiency of Capital (MEC) represent?
- a)The highest rate of return expected from an additional unit of capital asset over its cost.
- b)The cost of producing a capital asset.
- c)The difference between gross investment and net investment.
- d)The total investment in the economy.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
What does the Marginal Efficiency of Capital (MEC) represent?a)The hig...
The Marginal Efficiency of Capital (MEC) represents the highest rate of return expected from an additional unit of capital asset over its cost.
Explanation:
What is Marginal Efficiency of Capital (MEC)?
- The Marginal Efficiency of Capital (MEC) is a concept in economics that refers to the expected rate of return on an investment in an additional unit of capital asset. It represents the additional net revenue that an additional unit of capital is expected to generate over its cost.
Significance of MEC:
- MEC is an important concept in investment decision-making as it helps businesses and investors determine the profitability of investing in additional capital assets. By comparing the MEC with the cost of capital, businesses can make informed decisions about whether to invest in new capital projects.
Calculation of MEC:
- The MEC is calculated by dividing the expected increase in net revenue from an additional unit of capital by the cost of acquiring that unit of capital. It represents the incremental rate of return on investment and helps businesses assess the potential profitability of investing in additional capital assets.
Importance of MEC:
- The MEC helps businesses and investors evaluate the potential returns on investment and make decisions about allocating resources to different capital projects. By comparing the MEC of different investment opportunities, businesses can prioritize investments that offer the highest returns and maximize profitability.
In conclusion, the Marginal Efficiency of Capital (MEC) represents the highest rate of return expected from an additional unit of capital asset over its cost, making it a crucial concept in investment decision-making.
Explanation:
What is Marginal Efficiency of Capital (MEC)?
- The Marginal Efficiency of Capital (MEC) is a concept in economics that refers to the expected rate of return on an investment in an additional unit of capital asset. It represents the additional net revenue that an additional unit of capital is expected to generate over its cost.
Significance of MEC:
- MEC is an important concept in investment decision-making as it helps businesses and investors determine the profitability of investing in additional capital assets. By comparing the MEC with the cost of capital, businesses can make informed decisions about whether to invest in new capital projects.
Calculation of MEC:
- The MEC is calculated by dividing the expected increase in net revenue from an additional unit of capital by the cost of acquiring that unit of capital. It represents the incremental rate of return on investment and helps businesses assess the potential profitability of investing in additional capital assets.
Importance of MEC:
- The MEC helps businesses and investors evaluate the potential returns on investment and make decisions about allocating resources to different capital projects. By comparing the MEC of different investment opportunities, businesses can prioritize investments that offer the highest returns and maximize profitability.
In conclusion, the Marginal Efficiency of Capital (MEC) represents the highest rate of return expected from an additional unit of capital asset over its cost, making it a crucial concept in investment decision-making.
Free Test
FREE
| Start Free Test |
Community Answer
What does the Marginal Efficiency of Capital (MEC) represent?a)The hig...
The MEC is the highest rate of return expected from an additional unit of a capital asset over its cost. It represents the potential profitability of investing in a new capital asset.
|
Explore Courses for B Com exam
|
|
Similar B Com Doubts
What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer?
Question Description
What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer?.
What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer?.
Solutions for What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice What does the Marginal Efficiency of Capital (MEC) represent?a)The highest rate of return expected from an additional unit of capital asset over its cost.b)The cost of producing a capital asset.c)The difference between gross investment and net investment.d)The total investment in the economy.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup