Macroeconomics
Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 4, Problem 4NP

a)

To determine

The user cost of capital.

b)

To determine

The number of machines that will allow ML to maximize its profit.

c)

To determine

The optimal number of machines for the company when the Missing Link must pay a tax equal to 40% of its gross revenue.

d)

To determine

The desired capital that is, the number of machines in use of Missing Link, when tax of 40% and investment tax credit of 20%, both are applicable.

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