economics problem, Business Economics

Assignment Help:
The manager of a movie production company is thinking of investing in new graphics computers for a price of $325,000. The computers are expected to have a useful life of 3 years. The machine is expected to save the firm $200,000 in the first year, $180,000 in the second year, and $60,000 in the third year. At the end of 3 years, a junk dealer would be willing to purchase the machine for $20,000. Alternatively, the manager could skip the machine, and invest the $325,000 at a guaranteed interest rate of 5%. Which choice is more profitable for the manager, buying the computers or investing the money at 5%?

Related Discussions:- economics problem

Game Theory, Usage of Game Theory in Managerial decision

Usage of Game Theory in Managerial decision

How does foreign debt management improve development, How does foreign debt...

How does foreign debt management improve development? Borrowing is a policy to encourage growth like aid represents an injection of resources within the economy which enable

Market analysis, The Australian government administers two programs that af...

The Australian government administers two programs that affect the market for cigarettes. First, media campaigns and labelling requirements aimed at making public aware of the dan

Explain the effects of a minimum wage, Problem 1: (a) Suppose the gover...

Problem 1: (a) Suppose the government decides to implement a minimum wage to help low-income workers. How will the minimum wage affect the demand for labor and what does this i

What is economic development theory, What is Economic development theory? ...

What is Economic development theory? Economic development theories and models seek to describe and predict how the: • Economies may develop or not over time in excess •

Explain the meaning of classical dichotomy, QUESTION Explain the meanin...

QUESTION Explain the meaning of classical dichotomy, neutrality of money and Walras law. b. "In a Walrasian general equilibrium model with money as a unit of account, only r

PRICE ELASTICITY DEMAND OF DOVE SOAP, PRICE ED OF DOVE SOAP IS GRATER THAN ...

PRICE ED OF DOVE SOAP IS GRATER THAN BATHING SOAP IN GENERAL.. GIVE REASON. AN WHAT U ANALYIS

Elasticity, 1. Why does the quantity of salt demanded tend to be unresponsi...

1. Why does the quantity of salt demanded tend to be unresponsive to changes in its price?

PROCESS CHART, INVESTIGATE AND FIND SOLUTION TO HOUSEKEEPING SAFETY PROCESS...

INVESTIGATE AND FIND SOLUTION TO HOUSEKEEPING SAFETY PROCESS WITH LAYOUT IN PLANT, WHAT PROCESS CHARTS WILL NEED TO SOLVE THIS PROBLEM

Write Your Message!

Captcha
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!

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