What amount of capital will you purchase

Assignment Help Financial Econometrics

Reference no: EM131200291

Suppose that new machines cost $504, and the marginal benefit from new machines is MB = 246 - 6K, where K is the number of machines purchased. The depreciation rate is 15%, and the dividend yield is 10%.

a. What amount of capital will you purchase? Why?

b. What amount of capital would you purchase if there were a 25% tax rate on cash earnings minus labor costs?

Reference no: EM131200291

Questions Cloud

Discuss the cause and effect variables that each theory : How would a Keynesian, Monetarist, and Neoclassical Theorist would each propose promoting economic growth to our economy based on it's current state? Discuss the cause and effect variables that each theory uses to explain business cycles.

Describe common challenges that you will find : Product evaluation is an important step to ensure that a product will meet the quality, features, and overall design that is acceptable to the consumer. Imagine that you are an evaluator for a new product. Describe common challenges that you will ..

Monetary aggregates currently published by federal reserve : Describe the current state of the U.S. economy using the two monetary aggregates (M1 and M2) currently published by the Federal Reserve. In your description, illustrate the trends of the two monetary aggregates. Evaluate what the Federal Reserve Bank..

What is the average voltage supplied by the amplifier : The duty ratio of a transistor switch used in a power width modulation (PWM) amplifier is d. If the output voltage level (high) of the amplifier is vref (the low level of the output = 0), what is the average voltage supplied by the amplifier to it..

What amount of capital will you purchase : What amount of capital will you purchase? Why? - What amount of capital would you purchase if there were a 25% tax rate on cash earnings minus labor costs?

Explain the difference between medicare and medicaid billing : Understand the history and impact of health insurance on health care reimbursement process and recognize various types of health insurance coverage. Identify the key elements of a managed care contract and identify the role HIPAA plays in the healt..

Indicate a practical application of this device : Also, a current limiting resistor of 20 kΩ is available for the base of the BJT and a resistor of 200 Ω is available in series with the power supply and the LED. Indicate a practical application of this device.

What value of will deplete the fund with fourth withdrawl : Quarterly deposits of $1,000 are made at t=1,2,3,4,5,6, and 7. Then, withdrawls of size A are made at t=12,13,14, and 15. If the fund pays interest at a quarterly compunding rate of 4%, what value of A will deplete the fund with the fourth withdrawl?

Connected and unconnected lookup transformations : When do we use dynamic cache and static cache in connected and unconnected lookup transformations?

User Account

All Pages