please help me analyze and answer the following with formula and explanation please so that i can learn. thank you 1. Investment ProblemCost of bldg.. =5MGross Revenue = 9.5 MOperating expense = 4MNominal interest rate = 12%Ongoing inflation rate = 8%a.) How much is the total profit?b.) Determine the expected rate of return (r)c.) Determine the real interest rated.) Determine the interest coste.) How much will be added to the firm's profit?2. In a closed economy with no government, a $1 billionincrease in initial spending leads to a $5 billion increase intotal income or output.a. What is the multiplier?b. What is the value of marginal propensity to save?c. What is the value marginal propensity to consume?

“Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

. Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest rate = 12% %3D Ongoing inflation rate = 8% a.) How much is the total profit? b.) Determine the expected rate of return (r) c.) Determine the real interest rate

. Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest rate = 12% %3D Ongoing inflation rate = 8% a.) How much is the total profit? b.) Determine the expected rate of return (r) c.) Determine the real interest rate

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 3P

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Question

please help me analyze and answer the following with formula and explanation please so that i can learn. thank you

1. Investment Problem
Cost of bldg.. =5M
Gross Revenue = 9.5 M
Operating expense = 4M
Nominal interest rate = 12%
Ongoing inflation rate = 8%
a.) How much is the total profit?
b.) Determine the expected rate of return (r)
c.) Determine the real interest rate
d.) Determine the interest cost
e.) How much will be added to the firm's profit?
2. In a closed economy with no government, a $1 billion
increase in initial spending leads to a $5 billion increase in
total income or output.
a. What is the multiplier?
b. What is the value of marginal propensity to save?
c. What is the value marginal propensity to consume?

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