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Let YE. = ZDKENE' and Y1 = zIKfNII'. Subscnpts D and 1 denote the current and future periods respectively. Let d is the depreciation rate;

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Let YE. = ZDKENE'\" and Y1 = zIKfNII'\". Subscnpts D and 1 denote the current and future periods respectively. Let d is the depreciation rate; I is the investment; run is the wage rate in period 0'; W1 is the wage rate in period 1; no is the prot in period l]; m is the prot in period 1; 'Iu' is the present value of the profits; and r is the real interest rate. [a] Derive the optimal investment schedule (Hint; Net MPK1 is equal to real interest rate]. Show all steps and provide explanations for the hi]! equations

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