A firm is considering an investment

Assignment Help Business Economics
Reference no: EM131253076

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: EM131253076

Questions Cloud

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? ..
Consider the business cycle and its four phases : Can the bad actually be good? Consider the business cycle and its four phases. Often times we anguish over the recessionary part of the cycle – there is increasing unemployment, bankruptcies, incomes and profits are dropping, production declining, et..
How firm can use economic calculation but bureaucracy cannot : Describe how Hayek believed markets would coordinate actions. Explain how firm can use economic calculation but a bureaucracy cannot? Explain why. Also explain why resources will be allocated to their highest value use even though each company is onl..
Make an argument in favor of tom bearing the risk of loss : Consider the following: Tom owns an automotive parts store for specialty vehicles in New York, New York. Pete, who lives in Newark, Delaware, owns a specialty vehicle and is in the market to buy a muffler. Pete calls Tom and tells Tom that he has 196..
A firm is considering an 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? ..
Why can distinction between fixed costs and variable costs : Why can the distinction between fixed costs and variable costs be made in the short run? Classify the following as fixed or variable costs: Interest on company bonds-Shipping charges, Payment for raw materials, Real estate taxes, Executive salaries
Fixed and variable costs involved with the production : Describe 3 key inputs(or factors of production) and fixed and variable costs involved with the production of Walmart apparel. Analyze these factors that impact your choice of inputs to produce Walmart apparel.
How is the market for gas-guzzlers affected : S&D applications: Describe the correct shift in the S&D graph for each market identified (in bold letters) below: If auto-workers receive a 20%-pay hike, how will the market for new cars be affected? If the teenage population increases, how will the ..
Write down demand and supply equations for wireless phones : Write down demand and supply equations for wireless phones; include two exogenous variables in each equation. Draw a supply-demand graph for wireless phones. Use your graph to show how a change in one of your exogenous variables affects the model’s e..

Reviews

Write a Review

Business Economics Questions & Answers

  A car manufacturing company adopts a new technology that

A car manufacturing company adopts a new technology that, ceteris paribus, increases the productivity of capital. At the same time, workers unionize and demand higher wages. Assume that for this firm capital and labor are substitutable. Which of the ..

  Explain why strict liability should

In 1191, Three-year old Douglas Moore was playing with one of BIC’s lighters. While playing with the lighter, he started a fire that severely injured his 17-month-old brother. BIC Manufactures Inc. Included several child-safety warning labels on thei..

  Discuss the social and economic effects of colonization

Discuss the social and economic effects of colonization? How did it contribute the “Price revolution”? What were the main tenets of bullionism/mercantilism? What policies and events combined to bring an end to the Spanish hegemony?

  Abc computer company has a 20000000 factory in silicon

abc computer company has a 20000000 factory in silicon valley. during the current year abc builds 2000000 worth of

  The price elasticity of demand for labor will depend

The price elasticity of demand for labor will depend upon all but the:

  Explain how black markets impact economic actives

Explain how “Black Markets” impact economic actives: Please explain in detail and use a supply and demand graph for your examples

  Q1 a new public to complete works project requires 200000

q1. a new public to complete works project requires 200000 hours of labor. but if the labor market is competitive and

  Increasingly influential in the global economy

What changes in trade policy can be expected as countries such as China and India become increasingly influential in the global economy?

  Mexican peso depreciates against the canadian dollar

Which of the following is likely to occur if the Mexican peso depreciates against the Canadian dollar, all else being equal?

  Is the law of diminishing returns impacted

Is the law of diminishing returns impacted as a result of firms not hiring the best workers that may be available for positions within the firm or organization? Explain your answer.

  Experimental composite engine block for an automobile

An experimental composite engine block for an automobile will trim 20 pounds of weight compared with a traditional cast iron engine block. It is estimated that at least $2,500 in life-cycle costs will be saved for every pound of weight reduction over..

  Illustrate how fast will his production and consumption

Illustrate how fast will his production and consumption grow over time. Compute the consumption of the farmer in each of the first five years under plans.

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