construct of utility
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J&J Enterprises is forced on Dec31,2000.At that point it has one asset costing $2,487.The asset has a 3 year life with no salvage value and in expected to generate cash flows of $1,000 on Dec31, in the years 2001,2002 and 2003.Actual results are the same as planned .Depreciation in the firm's only expense .All income is to be distributed as dividends on the 3 dates mentioned .Other information includes :
The price index stands at 100 on dec 31,2000.It goes up to 104 and 108on January 1,2002and 2003 respectively.
Net realizable value of the asset on Dec31,in the years 2001,2002,and 2003 is $1,500, $600 and $0 respectively
The firm's asset IRR is 10%
Based on the information you have now created briefly address the following questions:
How does the information you produced meet the theoretical notion of ''usefulness''
Is the construct of utility a scientific or cultural notion ?
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construct of utility
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