ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A A company is trying to decide how many machines to buy, each costing $600. The interest rate is 6% and the depreciation rate of capital is 6% per
X year. Each product can be sold at $10 and the company has to pay 20% taxes on sale revenues. The yearly production of the company is given by
the following numbers:
Number of machines
Number of products produced per year
Marginal product of capital
1
100
150
3
180
4
194
5
204
208
How many machines will a profit maximizing firm purchase?
Selected Answer:
O D. 3
Answers:
O A, 5
В, 6
С. 4
D. 3
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Transcribed Image Text:A A company is trying to decide how many machines to buy, each costing $600. The interest rate is 6% and the depreciation rate of capital is 6% per X year. Each product can be sold at $10 and the company has to pay 20% taxes on sale revenues. The yearly production of the company is given by the following numbers: Number of machines Number of products produced per year Marginal product of capital 1 100 150 3 180 4 194 5 204 208 How many machines will a profit maximizing firm purchase? Selected Answer: O D. 3 Answers: O A, 5 В, 6 С. 4 D. 3
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