Question
In the two-period model of investment the production function is given by Q=9K(2/3) . The initial capital stock is K1=110. The interest rate is 20%.
In the two-period model of investment the production function is given by Q=9K(2/3) . The initial capital stock is K1=110. The interest rate is 20%.
a) What is the optimal amount of investment if capital depreciates 100 percent per year?
b) How would your answer to a) change if capital depreciated by 10 percent per year?
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a In the twoperiod model of investment the optimal amount of investment can be determined by maximiz...
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Managerial Economics
Authors: William F. Samuelson, Stephen G. Marks
8th edition
1118808940, 978-1119025900, 1119025907, 978-1119025924, 978-1118808948
