A manager is considering investing in a new piece of equipment. The equipment cost $50,000 and the manager will finance the full amount of the cost over three years at an interest rate of 4 percent. In the third year, the manager will repay the entire principal of the loan plus the year's annual interest, after making interest-only payments for the first two years. The equipment will generate
$30,000 in future operating profit each of the three years and has a salvage value of zero at the end of the three years. The tax rate on the firm's profit is 8 percent each year. What is the net present value of the investment?
A) $27,036
B) $20,589
C) $32,598
D) $35,852
A) $27,036
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Which combination of fiscal policy actions would most likely offset each other?
A. An increase in taxes, but no change in government purchases B. A decrease in taxes and an increase in government purchases C. An increase in taxes and an increase in government purchases D. A decrease in government purchases, but no change in taxes
If the population increases and input prices decrease, the equilibrium quantity of a product will definitely increase
Indicate whether the statement is true or false
Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?
a. unemployment rises and the labor force is unchanged b. unemployment rises and the labor force falls c. unemployment and the labor force are unchanged d. unemployment is unchanged and the labor force falls
One fundamental determinant of the rate of growth is the rate of _______. To have more consumption in the? future, we have to _____ rather than consume. In? general, countries that have had higher rates of _______ have had higher rates of growth in per capita real GDP.
Fill in the blank(s) with the appropriate word(s).