Calculate threal interest rate and current inflation

Assignment Help Econometrics
Reference no: EM13213818

A baker is considering expanding her busines by adding an additional oven to her kitchen. The new oven would cost $14,000. The baker expects the new oven to bring in additional profits of $15,800 after taking out the cost of running the oven. The baker can borrow at a nominal rate of 16% and the current inflation is 4%. Calculate threal interest rate. Should she make the investment?

Reference no: EM13213818

Questions Cloud

Determine the equivalent annual cost of operating the truck : you have operating and maintenance costs that start at $15,000 the first year and increase by $2,000 per year thereafter. assume that the salvage value at the end of five years is $9,000 and interest rate is 12%. Determine the equivalent annual co..
Explain the density of rainwater : a particular sample of rainwater is 0.2 ppb. Assume the density of rainwater is close to 1.00 g/mL and find the molar concentration of C20H42.
Can you justify the trade agreement on the basis of pareto : Country A has soil that is suited to corn production and yields 135 bushels per acre. Country B has soil that is not suited for corn and yields only 45 bushels per acre. Country A has soil that is not suited for soybean production and yields 15 bu..
Determine what is the flask''s volume : when filled with water (d=1.00 g/cm 3) the flask and it contents weigh 518.3 g. what is the flask's volume?
Calculate threal interest rate and current inflation : A baker is considering expanding her busines by adding an additional oven to her kitchen. The new oven would cost $14,000. The baker expects the new oven to bring in additional profits of $15,800 after taking out the cost of running the oven.
Explain how many grams of neon are in the sign : A neon sign is made of glass tubing whose inside diameter is 2.5 cm and whose length is 5.5 cm. If the sign contains neon at a pressure of 1.75 torr at 35o Celcius
Explain the benefits and risks of debt financing : Identify and explain the benefits and risks of debt financing. A two-paragraph answer will suffice - determine the weightings of debt and equity in the capital structure.
Define the inverse demand curve and mr curves : The following are the inverse demand curve and MR curves for a monopolistically competitive firm. P = 1000 - 2Q MR = 1000 - 4Q Where P is the price of the product and Q is the level of production. For the 200th unit of Q, MR is equal to.
Explain formula of a hydrocarbon containing five carbon atom : Give the molecular formula of a hydrocarbon containing five carbon atom containing five carbon atoms that is (a.) an alkane, (b.) a cycloalkane, (c.) an alkene, (d.) an alkyne

Reviews

Write a Review

Econometrics Questions & Answers

  Calculate the effect on the equilibrium interest rate

The demand curve and supply curve for one-year discount bonds with a face value of $1,000 are represented by the following equations: Bd: Price = -0.06 Quantity + 1140 Bs Price = Quantity + 700 suppose that, as a result of monetary policy actions.

  What is johns elasticity of demand at his profit-maximizing

John runs the only carwash in town; he is a monopolist. John estimates his daily demand for carwashes is given by the expression Q = 100?4P, where Q is the number of carwashes drivers will purchase at price P. It costs John $5 in electricity, soap..

  What is the break-even level of earnings under the program

What is the breakeven level of hour of work under the program I have gotten help on the first part of the question and found that the break even level of earnings was $140 and he would work for 20 hours/week.The other part

  Find probability of a major earthquake in the coming year

Helen just bought a house for $250,000. Earthquake insurance, which would pay $250,000 in the event of a major earthquake, is available for $25,000. Helen estimates that the probability of a major earthquake in the coming year is 10 percent, and t..

  What are the resulting values of employment

Consider an economy in which the marginal labor MPN is MPN= 309-2N, where N is the amount of labour used. The amount of labor supplied, NS, is given by NS=22+12w+2T, where w is the real wage and T is a lump-sump tax levied on individuals.

  Real gdp rose by what percent

Suppose nominal GDP in 2005 was $15 trillion, and in 2006 it was $16 trillion. The general price index in 2005 was 100, and in 2006 it was 103. Between 2005 and 2006, real GDP rose by what percent

  Calculate the price and quantity to maximize tr

Enumerate the various objectives a firm might have and how the price mechanism can be used to realize such goals. While you're at it, calculate the price and quantity to: (a) Maximize TR (b) Maximize total profit

  What is the variability in q is explained by the equation

Obtain a linear function for demand in the form Q = A +bP using linear regression formulae (contained in the book/appendix)from these five price/quantity points: P= 20, 17, 15, 10, 8 Q = 2, 12, 16, 20, 30 What % of the variability in Q is explained b..

  How do the car prices of both countries compare

A Honda Accord sells for $28,000 in the United States and for SF35,520 in Switzerland. Given an exchange rate of SF1.25 = $1, how do the car prices of both countries compare

  What are the potential weakness of the model

The forecasting staff for the Prizer Corp has developed a model to predict sales of its air cushioned ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 40 Z.

  Find the equilibrium employment in the whole economy

Suppose there are 100 firms in the economy. Let us call them firm 1, firm 2, ..., and firm 100. For firm j (j=1,2,...,100) the labor demand (or equivalently MPN) is Nj = 1 - 0.02w where w is the real wage. Note that labor demand function for the w..

  What is current average product of labor for powerguns co

The monthly wage rate is $3,000 per worker and the monthly rental rate for a machine is $6,000. Currently PowerGuns Co. employs 25 workers and 40 machines. Assume perfect divisibility of labor and machines. A. What is the current average product o..

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