A firm spent $2 million for new equipment that reduces greenhouse gases in their operations. The process improvement saved them $14,000 in the first month. (a) What is the first month’s rate of return on this investment? Express that value on an annual effective basis. (b) If this investment was judged not to make economic sense, should some entity pay to reduce such emissions? Who and why?

One of the concerns of economists and policy makers is the share of the labor factor in the total income of the economy. Differently, what part of the GDP goes to the workers and what part of the GDP goes to the owners of the companies. A growth in income inequalities should translate into a ** drop * in the labor factor. GDP data in terms of income allows us to see what is happening in the case of Canada. kt = i + (1 – 8)k;-1 %3D Yt = At · k1 Ct = (1 – s) · Yt Yt = C + i %3D R = a A¿'• k 1 (a-1) wi = (1 – a) · Yt %3D where kt is the stock of productive capital per worker at the end of period t, yt ,ct and it represent GDP, consumption, and investment in productive capital, Rt is the interest rate in the economy and wt is the salary. At is the level of productivity in the economy and is considered exogenous, as is the share of capital in production a and the household s savings rate. A) Given the information provided, what are the endogenous variables of the model? B) Now assume that…

M2.

Vebco Water and Gas received a contract for a seawater desalination plant wherein the company expected to make a 28% rate of return on its investment. 1. If Vebco invested $8 million the first year, what was the amount of its profit in that year? 2. What amount would have to be invested to realize the same monetary amount of return if the rate decreases to 15% per year?