Suppose a handbill publisher can buy a new duplicating machine for $ 500 and the duplicator has a 1-year life. The machine is expected to contribute $ 550 to the year's net revenue. Instructions: enter your anwer as a whole number. What is the expected rate of return? (in percentage) If the real interest rate at which funds can be borrowed to purchase the machine is 8 percent, will the publisher choose to invest in the machine? Will it invest in the machine if the real interest rate is 9 percent? if it is 11 percent?
Suppose a handbill publisher can buy a new duplicating machine for $ 500 and the duplicator has a 1-year life. The machine is expected to contribute $ 550 to the year's net revenue. Instructions: enter your anwer as a whole number. What is the expected rate of return? (in percentage) If the real interest rate at which funds can be borrowed to purchase the machine is 8 percent, will the publisher choose to invest in the machine? Will it invest in the machine if the real interest rate is 9 percent? if it is 11 percent?
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 1.3P
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Suppose a handbill publisher can buy a new duplicating machine for $ 500 and the duplicator has a 1-year life. The machine is expected to contribute $ 550 to the year's net revenue.
Instructions: enter your anwer as a whole number.
What is the expected
If the real interest rate at which funds can be borrowed to purchase the machine is 8 percent, will the publisher choose to invest in the machine?
Will it invest in the machine if the real interest rate is 9 percent? if it is 11 percent?
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