This year, the nominal per capita GDP is $48,387 in US and $13,044 in Romania. For...
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This year, the nominal per capita GDP is $48,387 in US and $13,044 in Romania. For the same year, the PPP adjusted GDP per capita is $48,387 in U.S. and $16,500 in Romania. Prices are projected to increase twice as fast in Romania as in US for the foreseeable future. a) If the price level is 100 in US today and increases by 2% per year, what will be the price level in Romania in three years? b) A small company in US would like to ensure that, there is enough funds to purchase 10 computers each year beginning next year (forever). A computer that meets company specifications costs $2,000 today. How much should the company invest today to fund all the future computer needs of the company if annual interest rate is 10%? (Assume that computer prices are going up exactly at the rate of inflation each year.) This year, the nominal per capita GDP is $48,387 in US and $13,044 in Romania. For the same year, the PPP adjusted GDP per capita is $48,387 in U.S. and $16,500 in Romania. Prices are projected to increase twice as fast in Romania as in US for the foreseeable future. a) If the price level is 100 in US today and increases by 2% per year, what will be the price level in Romania in three years? b) A small company in US would like to ensure that, there is enough funds to purchase 10 computers each year beginning next year (forever). A computer that meets company specifications costs $2,000 today. How much should the company invest today to fund all the future computer needs of the company if annual interest rate is 10%? (Assume that computer prices are going up exactly at the rate of inflation each year.)
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a If the price level in the US today is 100 and increases by 2 per year in three years the price lev... View the full answer
Related Book For
Essentials Of Marketing
ISBN: 9781259573538
15th Edition
Authors: William Perreault, Joseph Cannon, E. Jerome McCarthy
Posted Date:
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