Which of the following machines has the lowest user cost? Machine A costs $15,000 and depreciates at a 25% rate, machine B costs $10,000 and depreciates at a rate of 20%, machine C costs $20,000 and depreciates at a rate of 10%, and machine D costs $17,000 and depreciates at a rate of 11%. The expected real interest rate is 5%.
A. Machine A
B. Machine B
C. Machine C
D. Machine D
Answer: B
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Which of the following statements concerning the supply of labor is true?
a. The supply of labor is determined by the prevailing wage rate. b. The labor supply curve is downward sloping. c. The wage rate has no effect on the supply of labor. d. None of these.
In Gelate, Pennsylvania, the market for compact discs has evolved as follows. There are two firms that each use a marquee to post the price they charge for compact discs. Each firm buys CDs from the same supplier at a cost of $5.00 per disc. The inverse market demand in their area is given by P=10-2Q=, where Q is the total output produced by the two firms.
a) Solve for the Bertrand equilibrium price and market output. b) Would your answer differ if the products were not perfect substitutes? Explain.
Which of the following approaches should the Fed use if it experiences large lags and mistakes in monetary policy?
A. Discretionary policy B. An eclectic approach C.Fixed rules D. Fiscal policy
If a British student pays her way to attend Harvard University, her action will:
A) cause the exchange rate of the British pound to rise. B) cause the exchange rate of the U.S. dollar to fall. C) change the supply of dollars in the foreign currency market. D) change the supply of pounds in the foreign currency market.