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A car company currently has capital stock of $100 million and desires a capital stock of $110 million. 1. If it experiences no depreciation, how
A car company currently has capital stock of $100 million and desires a capital stock of $110 million. 1. If it experiences no depreciation, how much will it need to invest to get to its desired level of capital stock? 2. If its annual depreciation is 5%, how much will it need to invest to get to its desired level? 3. If its annual depreciation is 10%, how much will it need to invest to get to its desired Principles of Macroeconomics 504 level?
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