User Account

All Pages

What rate of interest would make you indifferent

Assignment Help Microeconomics
Reference no: EM132128450

Question: Read the following letter from a magazine publisher: Dear Parent: Currently your Growing Child/Growing Parent subscription will expire with your 24-month issue. To renew on an annual basis until your child reaches 72 months would cost you a total of $63.84 ($15.96 per year). We feel it is so important for you to continue receiving this material until the 72nd month, that we offer you an opportunity to renew now for $57.12. Not only is this a savings of 10% over the regular rate, but it is an excellent inflation hedge for you against increasing rates in the future. Please act now by sending $57.12.

(a) If your money is worth 6% per year, determine whether this offer can be of any value.

(b) What rate of interest would make you indifferent between the two renewal options?

Reference no: EM132128450

Questions Cloud

What is the new equilibrium price and quantity : The government becomes aware of the black market and reinforces the police so that half of the cigarette supply would be seized and destroyed.
What is hazard index HQ and RQ associated with this exposure : What is the hazard index HQ and RQ associated with this exposure? Does the HQ and RQ indicate this is a safe level of exposure?
Why is it important for a leader to be able to manage across : Communicate your thoughts on the following statement: "Leaders who cannot understand cultural differences in people cannot lead or manage them."
Explain the competitive strategies to focus on market niche : Explain the following competitive strategies : Focus on market niche, low-cost leadership, product differentiation, customer-supplier intimacy.
What rate of interest would make you indifferent : Read the following letter from a magazine publisher: Dear Parent: Currently your Growing Child/Growing Parent subscription will expire with your 24-month issue.
What is the role of strategic planning in creating value : What is the role of strategic planning in creating value for an organization?
What do you think will happen to the price of ice cream : Use your knowledge of the factors that cause shifts in demand, and in a multi-paragraph essay, provide at least three reasons why ice cream sales fluctuate.
Write a procedure or policy for the organization : Description, based on the textbook and other relevant sources, of what ISO-9000 is and the purpose of this type of certification.
Determine whether the given offer can be of any value : Read the following letter from a magazine publisher: Dear Parent: Currently your Growing Child/Growing Parent subscription will expire with your 24-month issue.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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