You are offered a 15-year investment and ask to select your preferred terms of interest which of the following is the most profitable option if the interest rate is 8% per year. (a) continuously. (b) annually, (c) semi-annually, (d) quarterly, (e) monthly, (f) daily.

Consider the market for rubber. suppose a massive forest fire causes 50% of the world’s supply of rubber to be destroyed. First, depict what happens in the market for rubber. Then, depict what happens in the market for tires (where rubber is an input). Last, depict what happens in the market for cars, where tires are an input. What happened to the price of cars? Now, suppose that in order combat this event, the government announces that starting in three months (i.e. in the future), the government will give a $1000 rebate on purchases of new cars (i.e. the price of cars will decrease in the future). What happens in the market for new cars today? What happens in the market for used cars today? Finally, what is the net effect of everything that occurred on new/used cars equilibrium price and quantity (Hint: for one of these market’s variables, the net effect will be ambiguous)?

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A manufacturing company has requested that $500,000 be spent on software and hardware to improve the efficiency of environmental control systems for the manufacturing process. This is expected to save $10,000 per year for 10 years in energy costs and $700,000 at the end of 10 years in equipment refurbishment costs. 1) Calculate the present worth at i= 5%? 2) Calculate the present worth at i= 6%? 3) Find the rate of return?