a. Suppose a newsprint publisher can buy a new duplicating machine for $100,000 and the duplicator has

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a. Suppose a newsprint publisher can buy a new duplicating machine for $100,000 and the duplicator has a

1-year life. The machine is expected to contribute $12,000 to the year’s revenue. (for this problem assume not other costs for the firm)

What is the expected rate of return on this investment for the year? (note: rate of return is not a $ profit figure but a rate=%)

b. If the interest rate at which funds can be borrowed to purchase the machine is 12.8 percent, will the publisher choose to invest in the machine? YES/NO and why..

Related Book For answer-question

Economics

ISBN: 978-0073375694

18th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

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Posted Date: Mar 09, 2024 05:33 AM

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a. Suppose a newsprint publisher can buy a new duplicating machine for $100,000 and the duplicator has

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a The expected rate of return on the investment for the year is 12 Heres how to calc... View the full answer

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