Final answer:
The company would likely consider the effective rate of return and the social benefits of reducing waste when purchasing inexpensive wastebaskets. The decision reflects an investment in sustainability and contributes to a greater quality of life and environmental conservation.
Step-by-step explanation:
If a company were to purchase inexpensive wastebaskets that are expected to be used for 3 years, the company would likely consider the effective rate of return on that investment. Assuming a company acts similarly to a firm investing with an effective rate of return at 4%, it might plan its expenditures accordingly. If such a firm invests $183 million, it is considering not just the private benefits but also the social benefits of its investment.When considering the purchase of wastebaskets, the company may also weigh the social benefits, such as waste reduction, which can save money for households and the community by reducing the expenses related to garbage disposal. The approach towards investing in durable goods versus disposable items can reflect a shift towards sustainability and may align with a broader goal to reduce the need for constant replacement, thus positively impacting the environment and society at large.
Reflecting on the environmental impact of our consumption, as with plastics ending up in landfills, serves as a reminder of the importance of making purchases that contribute to sustainability, rather than disposability, and align with the values of a quality life and conservation of the planet.If a company were to purchase inexpensive wastebaskets that are expected to be used for 3 years, the company would save money on the initial purchase cost but may end up spending more on replacements in the long run. While it may seem like a cost-effective decision upfront, inexpensive wastebaskets may not be as durable and could break or wear out sooner than expected. This would result in additional costs for the company to purchase new wastebaskets.