(21) A firm just purchased a new machine which costs $1000 in real dollars and plan to depreciate the machine at a rate of 25% each year. The firm can borrow money from the bank at a nominal rate of 8%, or receive a nominal rate of 3% for depositing money at the bank. The expected inflation rate in the coming year is 2%. The firm borrowed money from the bank to purchase the machine. The firm's user cost of capital for the first year is (A) $250 (B) $260 (C) $280 (D) 6010

(21) A firm just purchased a new machine which costs $1000 in real dollars and plan to depreciate the machine at a rate of 25% each year. The firm can borrow money from the bank at a nominal rate of 8%, or receive a nominal rate of 3% for depositing money at the bank. The expected inflation rate in the coming year is 2%. The firm borrowed money from the bank to purchase the machine. The firm's user cost of capital for the first year is (A) $250 (B) $260 (C) $280 (D) 6010

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A new factory in a small town has an annual payroll of $6 million. It is expected that 60% of this moneywill be spend on the town will by factory personnel. The people in the town who receive this money areexpected to spend 60% of what they receive in the town, and so on.(a) What is the total of all this spending (called the “total economic impact”) of the factory on the towneach year?(b) How much additional spending will be generated by a 10 million dollar tax rebate if 60% of allincome is spent?
Find Gross Value Added at Factor Cost: 2000 (i) Units of output sold (ii) Price per unit of output () (iii) Depreciation (7) (iv) change in stock (7) (v) Intermediate costs () 20 2000 (-) 500 15,000 3,000 (vi) Subsidy (7)
Consider a five-year MACRS asset, which can be purchased at $80.000. Thesalvage value of this asset is expected to be $42,000 at the end of three years.What is the amount of gain (or loss) when the asset is disposed of at the end of three years?(a) Gain $11,280(b) Gain $9,860(c) Loss $9,860(d) Gain $18,960
Find Net Value Added at Market Price (i) Depreciation (7) (ii) Output sold (units) (iii) Price per unit of output (7) 700 900 40 (iv) Closing stock (7) () Opening stock (7) (vi) Sales tax (7) (vii) Intermediate cost (7) 1,000 800 3,000 20,000
10 Rate of Interest (%) 2 8 00 9 0 100 200 Amount of Money Demanded ($B) D1 OS D₁ D3 + D2 10 Rate of Interest (%) N 8 6 0 D2 11 100 200 300 400 Amount of Money Demanded ($B) 10 Rate of Interest (%) 2 8 9 Which one of the lines represents the asset demand for money? 0 S D3 100 200 300 400 500600 Amount of Money Demanded ($B)
If GNP is $800 bilion and depreciation is $90 bilion , then net national product is (a) $710 bilion (b) $980 bilion (c) $845 bilion (d) $890 bilion
A bank with 100 million in deposits 15 million of cash in the bank,10 million in deposit with central bank,15 million in government securities in it vault .It total reserves equals? (a).10 (b).15 (c)25 (d)40
A Company manufactures and sells one product. The product has the following cost and revenue data: Selling price Per Unit (AED) 70 Variable cost Per Unit (AED) 30 Total fixed expenses per month are as follows: Expenses types AED Advertising Rent Heating 263,069 100,000 100,000 The company produced and sold 10,000 units during the month and had no beginning or ending inventories. a. What is the break-even value in Dirhams?
50. Suppose that the Bank of Canada sets the Overnight Rate Target at 5%. What is the Bank Rate? (A) 5.5%. (B) 5.25%. (C) 5%. (D) 4.75%.
Siemens AG invests €80,000,000 to build a manufacturing plant to build wind turbines. The company predicts net cash flows of €16,000,000 per year for the next 8 years. Assume the company requires an 8% rate of return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (1) What is the payback period of this investment? (2) What is the net present value of this investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the payback period of this investment? Payback Period Choose Numerator: 1 1 Choose Denominator: ‒‒‒ www Next >
(1) gross domestic product 2,582,198 gross national income 2,622,315 national disponsable income 2,199,701 final consuption 1,694,623 give the information in the above data , what is the national saving? (a) 927,692 million SR (b) 887,575 million SR (c) 505,078 million SR (d) no correct answerr is provide
Calculate gross value added of factor cost : (i) Units of output gold (units) 1000 (ii) Price per unit of output (Rs.) 30 (iii) Depreciation (Rs.) 1000 (iv) Intermediate cost (Rs.) 12000 (v) Closing stock (Rs.) 3000 (vi) Opening stock (Rs.) 2000 (vii) Excise (Rs.) 2500 (viii) Sales Tax 3500