User Account

All Pages

Interest rate for company to borrow

Assignment Help Macroeconomics
Reference no: EM132506894

Suppose your company could purchase a machine for $620,000 that would lead to increased profits of $160,000 per year for the next 5 years. The profits are received at the end of year 1 and the end of the 4 years after that. Based on the interest rate for your company to borrow is 5%, an estimated inflation rate of 2%, and your risk/inconvenience factors are assessed to be a rate of 5%, you are using a discount rate of 12%. Should you purchase this machine? Show your calculations.

Reference no: EM132506894

Questions Cloud

Write an initial post composed of three paragraphs : For this reflection, write an initial post composed of three paragraphs. This week's reflection coincides with the persuasive essay you will finishing next week
Computing the nominal rate-real rate : Suppose that you took out a $2,000 loan in January and had to pay $50 in annual interest. During the year, inflation was 2%.
What is the one year forward rate for your currency : Explain your government's exchange rate policy (fixed, floating - clean or dirty or target range). Prepare a graph showing your currency's exchange rate versus.
Describe the structure and function of the group you planned : Social workers support clients through many unpleasant situations. Social work roles center around simplifying those events for their clients as well as.
Interest rate for company to borrow : Suppose your company could purchase a machine for $620,000 that would lead to increased profits of $160,000 per year for the next 5 years.
Justify why a community assessment is necessary : Justify why a community assessment is necessary. Discuss the range of partnership or stakeholders that might be useful in conducting community assessments.
Describe the most important contribution of the individual : Describe the most important contribution(s) of the individual to the field. Explain how the study of this individual would inform your practice as a social.
Calculate the level of saving in year 2 : Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.84. Suppose that in Year 1, disposable income in the economy
EN7908 Control and Environmental Sustainability Assignment : EN7908 Manufacturing, Control and Environmental Sustainability Assignment Help and Solution - Bahrain Polytechnic, Bahrain - Assessment Writing Service

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd