I missed this question on the test, my instructor will not give the correct answers but stated this will be on the final exam.

So I need need help in understanding if you own a golf resort and you need to determine how many golf carts you need to buy to maximize profits.Please answer the following questions given the information below.

A brand new golf cart costs 1800 rounds of golf(this is your output) and the rate of depreciation is 6% (0.06).

The real interest rate is 4% (.04). And the expected marginal product of capital is given by MPK^f= 500 - 10K.

There is a tax on capital so tao () = 25% (.25)

a) What is the (tax adjusted) user cost of capital and what is this user cost expressed in?

b) How many golf carts should you buy to maximize profits? How do I draw the graph to show the uc/K graph depicting the state of affairs and label this initial profit maximizing condition as point

B. Now conditions change.The following two shocks occur simultaneously:the government offers an investment tax credit = .25 = ITC. The expected marginal product of capital changes and is now MPK^f= 400 - 10K.Resolve for K* and show as point B on your uc/K diagram.