Suppose that new machines cost $504, and the marginal benefit from new machines is MB = 246
Question:
a. What amount of capital will you purchase? Why?
b. What amount of capital would you purchase if there were a 25% tax rate on cash earnings minus labor costs?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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