Equivalently rental cost of capital

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Reference no: EM13735690

You are given the following information about a firm's investment decision. Calculate its user cost of capital (equivalently rental cost of capital). (Round to the nearest dollar)

Price of firm's output: P = $100

(Annual) Marginal production of capital (K): MPK = 400 - 2*K

Price of capital: PK = $2000

(Annual) Real interest rate: r = 0.04

(Annual) depreciation rate of capital: d = 0.1

Reference no: EM13735690

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