Question
Consider a firm with a contract to sell an asset for $137,000 five years from now. The asset costs $78,400 to produce today. Given a
Consider a firm with a contract to sell an asset for $137,000 five years from now. The asset costs $78,400 to produce today. Given a relevant discount rate on this asset of 13 percent per year, calculate the profit (or loss) the firm will make on this asset. (A loss should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Firm's profit(loss) | $ |
At what rate does the firm just break even? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Break-even interest rate | % |
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