Should the firm make the investment

Assignment Help Business Economics
Reference no: EM13801145

A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment? Show your work

Reference no: EM13801145

Questions Cloud

Relationship between age and job performance : organisational behaviour. Why is the relationship between age and job performance likely to be in issue of increasing importance during the next decade?
What happens to taxes-consumption-aggregate demand : Calculate and graph what happens to T(taxes), C(consumption), AD(aggregate demand), GDP, and Prices if the President raises taxes by 100 billion and the MPC = .80.
Use shadow costs to calculate the total production costs : A brewery produces regular beer and a lower carb light beer. steady customers of the brewery buy 10 units of regular beer and 15 units of light beer monthly. while setting up the brewery the management decided to produce extra beer, beyond that neede..
What indifference curves and budget constraints : What indifference curves and budget constraints to explain how an individual labor supply is affected by qualifying for the TANF program?
Should the firm make the investment : A firm is considering an investment that will earn a 6% rate of return. If it were to borrow the money, it would have to pay 8% interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment?
Short-long-term effects of removing such trade restrictions : Who gains and who loses from the trade barriers that create the price differences? What arguments are used to support trade restrictions in these commodities? What might be the short-term and long-term effects of removing such trade restrictions?
How much should douglas boats expand : Douglas Boats is a supplier of boating equipment for the states of Oregon and Washington. It sells 5,000 White Marine WM-4 diesel engines every year. These engines are shipped to Douglas in a shipping container of 100 cubic feet, and Douglas Boats ke..
Find the equilibrium price and quantity : Supply and demand for corn. At $2.13 per bushel, the annual supply for   corn in the Midwest is 8.9 billion bushels and the annual demand is 6.5 billion bushels. When the price falls to $1.50 per bushel, the annual supply decreases to 8.2 billion bus..
Free trade contribute to improvement of economic well-being : The gains from specialization and trade are based on comparative advantage, which reflects the relative opportunity cost. When countries specialize in producing goods and services for which they have comparative advantages, total production in the gl..

Reviews

Write a Review

Business Economics Questions & Answers

  Examples of economic indicators

Which of the following are examples of economic indicators? check all that apply. Which of the following statements regarding procyclical, countercyclical and leading economic indicators is corrects? check all that apply

  Marginal income product of hiring one low-skilled worker

Illustrate what is the marginal income product of hiring one low-skilled worker to clear woodland for one month.

  Q1 the wage rate is pound5 and the rental rate cost of

q1. the wage rate is pound5 and the rental rate cost of capital is pound2. calculate the lowest cost method of making 4

  Pursues an expansionary monetary policy

For each of the following events, describe the effects on the Canadian economy assuming that it is originally in long run equilibrium. For each, explain the short and long run effects in the context of an aggregate supply and aggregate demand diagram..

  Monopolistic competitive market

firm competing in a monopolistic competitive market. What conditions exist when economic profits are maximized.

  Qjoseph jones a manager at computer science inc csi

q.joseph jones a manager at computer science inc. csi received 10000 shares of company stock as part of his

  Annual operation and maintenance cost

Don Garlits is a landscaper. He is considering the purchase of a new commerical lawn mower, either the Atlas or the Zippy. Construct a choice table for interest rates from 0% to 100%.

  Compute nominal gdp and real gdp also the gdp deflator

Compute nominal GDP, real GDP also the GDP deflator for each year, using 20010 as the base year.

  Elucidate what is the lerner index for this industry

Suppose the demand curve for a monopolist is q=500-p, and the marginal revenue function is mr=500-2q. The monopolist has a constant marginal and average total cost of $50 per unit. Elucidate what is the lerner index for this industry.

  Illustrate what has happened to the value of the dollar

Illustrate what has happened to the value of the dollar. Illustrate what are the comapny's hourly labor costs in dollars at both exchange.

  Net borrower-net lender

Suppose this year Angola borrows $100 million from foreign countries while it lends $15 million. Angola definitely is a net borrower. net lender.

  Club to engage in third-degree price discrimination

A private golf club has two types of members. Serious golfers each have an individual demand curve given by = 35 ? .1??, while casual golfers each have an individual demand curve given by ?? = 10 ? .2??. Here, P is the price per round of golf and Q i..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd