Question
a. Suppose a newsprint publisher can buy a new duplicating machine for $100,000 and the duplicator has a 1-year life. The machine is expected to
a. Suppose a newsprint publisher can buy a new duplicating machine for $100,000 and the duplicator has a
1-year life. The machine is expected to contribute $12,000 to the year’s revenue. (for this problem assume not other costs for the firm)
What is the expected rate of return on this investment for the year? (note: rate of return is not a $ profit figure but a rate=%)b. If the interest rate at which funds can be borrowed to purchase the machine is 12.8 percent, will the publisher choose to invest in the machine? YES/NO and why..
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a The expected rate of return on the investment for the year is 12 Heres how to calc...
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Economics
Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn
18th edition
978-0077413798, 0-07-336880-6, 77413792, 978-0-07-33688, 978-0073375694
