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- The company that you manage has invested$5 million in developing a new product, butthe development is not quite finished. At arecent meeting, your salespeople report that theintroduction of competing products has reduced theexpected sales of your new product to $3 million. Ifit would cost $1 million to finish development andmake the product, should you go ahead and do so?What is the most that you should pay to completedevelopment?Which of the following event(s) would cause the rental yield of a flat to increase? A. An increase in interest rateB. A decrease in life of the flatC. An increase in future rentD. A & CE. None of the aboveWhat is the advantage of capital gains treatment of income compared to expensing?
- Discuss the ways a college degree a form of capital.The value of net factor income from abroad can never be 0 True /FalseSuppose Fred's wage-schooling relationship is given by Years of Schooling Earnings 9 $28,000 10 $31,150 11 $33,700 12 $35,900 13 $37,400 14 $38,500 Derive the marginal rate of return schedule. When will Fred quit school if his discount rate is 5 percent? What if the discount rate is 10 percent?
- Suppose Carl’s wage-schooling locus is given byYears of Schooling Earnings 9 $18,500 10 $20,350 11 $22,000 12 $23,100 13 $23,900 14 $24,000Derive the marginal rate of return schedule. When will Carl quit school if his discount rate is 4 percent? What if the discount rate is 12 percent?Suppose your rich relative promises you the choice between $20,000 today and a delayed graduation gift of a $45,000 in four years time. Assume that the interest rate is 5 per cent. *Compare the present discounted value of the delayed gift versus the immediate gift. *What is the interest rate that would equalize the present discounted value ofthe two gifts? What happens as interest rates become higher than this value?Labour Economics Question The direct cost of a training module to be taken by an employee is $5000 and the opportunity cost involved is $7000. The expected incremental earnings to be received by the employee in the first 5 years are $3000, $3500, $4000, $4500 and $5000, respectively. Assuming the interest rate is 10%. Based on the concept of net present value, should the employee pursue this training module? Show all steps of calculations. Why opportunity cost not combine to same direct cost at calculated NPV?
- Distinguish between nominal and real interest rates. Which is more relevant in making investment and R&D decisions?Asap Seniority is the optimal method for the allocation of richer terms, conditions and benefits of employment. Do you agree or disagree, and why?Suppose the interest rate is 6 percent. Round your answers to 2 decimal places. a. What is the future value of $100 five years from now? How much of the futurebvalue is totla interest? b. By how much would total interest be greater at an interest rate of 8 percent than at an interest rate of 6 percent?