Projected revenue from a project

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1. If part of GDP, label which type of spending it is, If not, explain why it is not part of GDP.

A. McDonalds (US firm) buying new playground structures from a US company for use its restaurants.

B. A US company has 40 bullet proof vests in unsold inventory at the end of the year.

C. The US secret service buying bullet proof vests from a US company.

2. In a given country:

Consumer spending= 70M     Investment spending= 40M

Capital inflows= 25M         Government spending=60M

Private saving=30M          Imports=60M

Exports=30M            

A. Calculate this country's GDP.

B. Does this country have a government deficit or surplus? Calculate it given the above information.

3. The interest rate is 5%. A firm's projected revenue from a project is $100M and the project costs are $97M

A. Calculate this firm's rate of return.

B. Should the firm proceed on this project given the above information? Why or why not?

4. A. Explain what a discouraged worker is and how they are included in the unemployment calculation.

B. How do discouraged workers impact the unemployment rate when the country initially starts moving out of a recession and into an expansion? Explain.

Reference no: EM131077143

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