In Firm A, the profit for the current year is ElI. Suppose Firm A plans to rent its machinery at the real rate of interest. The current price of the machinery is 40 *Ell,, the real rate of interest is 1% per year of the current price, and the rate of depreciation is 6% per year of the current profit. On the basis of static expectations, the expected present value of profits is 6 2.17 xx . (Round your answer to two decimal places.) (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a subscript can be created with the _ character.) Suppose Firm A is planning to invest in a machinery today that yields a profit of (200 in year t+ 1. The constant rate of depreciation is 10% per year, the real rate of interest is 3% for year t + 1, and this rate increases by 20 basis points every year (1% = 100 basis points) The expected present value of the profit for year + 5 is ( assuming that the profit increases at a rate of 5% per year. (Round your answer to two decimal places.) There are two firms, Firm A and B, belonging to the same industry with the following details. Particulars Firm A (6) Firm B (6) Earnings before interest and tax 300 200 Capital stock 200 180 Interest payments 40 20 Tax payments 30 25 Suppose Firm A is expected to make a profit of 66 next year and increase by 10% every year and Firm B is expected to make a profit of 64 next year and increase by 10% every year. Which of the following is true? O A. In the current year, Firm B's investment is more than Firm A's investment. O B. In the next year, Firm A's investment is more than Firm B's investment. O C. In the next year, Firm B's investment is more than Firm A's investment. O D. In the current year, Firm A's investment is more than Firm B's investment. Tobin's q is positively related to investment and |negatively|related to real interest rates