What will happen to the projects real rate of return

Assignment Help Econometrics

Reference no: EM13234743

Suppose a business is considering purchasing a $40,000 machine whose operation will result in increased sales of $30,000 per year and increased operating costs of $10,000; additional profits will be taxed a a rate of 50%. Depreciation is assumed to be taken on a straight-line basis over four years, with no expected salvage value. What will happen to this project's real rate of return if inflation during the next four years is expected to be 10% compounded annually?

Reference no: EM13234743

Questions Cloud

Hiring in estevan saskatchewan a challenge : Why is hiring in Estevan Saskatchewan a challenge and what are the challenges? especially hiring electricians, welders, powerline techs etc.

What is the theoretical minimum number of workers required : An assembly line has 5 operations with total work content of 5.62 min. The demand is 30 units/8hour shift. What is the theoretical minimum number of workers required on this line?

Calculate the wavelength of the photon emitted : Find the mathematical relationship that relates energy of a photon emitted as an electron relaxes from a higher energy level to a lower energy level in a hydrogen atom. Use this equation to calculate the wavelength of the photon emitted in units o..

Explain equation to calculate the wavelength of the photon : Use this equation to calculate the wavelength of the photon emitted in units of nanometers for the following transitions.

What will happen to the projects real rate of return : Suppose a business is considering purchasing a $40,000 machine whose operation will result in increased sales of $30,000 per year and increased operating costs of $10,000; additional profits will be taxed a a rate of 50%

Find the total surface area of these n spherical droplets : The basic function of an automobile's carburetor is to atomize the gasoline and mix it with air to promote rapid combustion

What are new equilibrium interest rate and level of income : Consider the economy of Hicksonia. A. The consumption function is given by C = 200 + 0.75(Y-T) Investment function is I = 200 - 25r Government purchases and taxes are both 100.

How does the wage compare to equilibrium wage : The economy has 1000 units of capital and a laor force of 1000 workers. a). Derive the equation describing labor demand in this economy as a function of the real wage and capital stock.

What is the refracted angle : A ray of light is incident on glass-air interface at the critical angle of 41 deg., what is the refracted angle, What is the strength of a lens which forms an image 24 cm from the lens when the object is 40 cm away

User Account

All Pages