Calculate the user cost of capital of a machine that costs $100,000 and depreciates at a rate of 25%, when the nominal interest rate is 4% and the expected inflation rate is 1%.
(a) $3000
(b) $25,000
(c) $28,000
(d) $29,000
In: Economics
Suppose that you are offered an investment at cost of 800. That investment will pay the following cash flows.
0. 1. 2. 3. 4. 5
0. 500. 400. 300. 200. 100
A) should you make the investment if the required rate of return is 12% per year? why? explain.
B) What is the internal rate of return of this cash flow stream? if you require a rate of return of 12% annually. Should you make the investment? Why? explain.
In: Finance
Cost of Competitive Firm
In Vienna, there is a competitive market for the production of upright pianos. David’s piano production firm can make at most six pianos per week.
|
Quantity |
Fixed Cost ($) |
Variable Cost ($) |
Total Cost ($) |
Marginal Cost ($) |
|
0 |
2000 |
--- |
||
|
1 |
5000 |
|||
|
2 |
2000 |
11000 |
||
|
3 |
18000 |
|||
|
4 |
8000 |
|||
|
5 |
37000 |
|||
|
6 |
45000 |
Complete the four cost columns in the table above.
If the market price of pianos is $8000 this week, how many pianos should David’s firm produce to maximise profit?
What would David’s profit be this week? $
8 points
In: Economics
Company A purchased a lathe on January 1, 2019, at a cost of $45,000. At the time of purchase, the lathe was expected to have a five-year economic life and a residual value of $3,000. Company A uses straight-line depreciation. At the beginning of 2021, Company A estimated the lathe to have a remaining life of four years with no residual value. For the year ended December 31, 2021, Company A would report depreciation expense of: A. $6750 B. $7050 C. $7000 D. $7500 I'm looking for the answer and an explanation please. TYIA
In: Accounting
Describe Telemedicine. Does Telemedicine increase or decrease the cost of healthcare?
In: Nursing
The cost of gasoline in an area follows an unknown distribution with a mean of $3.79 and a standard deviation of $0.92. Suppose a random sample of 45 di↵erent gas prices is drawn over a 5 year period.
a) What is the probability that the average price of gas there over those 5 years is less than $3.95?
b) What is the probability that the average price of gas there over those 5 years is more than $4.00.
In: Statistics and Probability
The annual subscription to a magazine costs $50 and this cost is expected to increase by 10 percent per year. A life subscription, on the other hand, costs $500. The relevant discount rate for analyzing this situation is 12 percent. In order to justify taking out a life subscription, what is your minimum life expectancy (approximately)
In: Finance
Discuss the concept behind NAFTA and how this reduces production cost.
In: Economics
In: Nursing
The Golden Goose is considering a project with an initial cost of $46,700. The project will produce cash inflows of $10,000 a year for the first two years and $12,000 a year for the following three years. What is the payback period?
In: Finance