1 answer

1. Assume that a firm has future marginal productivity of capital given by MPK-A(100-K). The price...

Question:

1. Assume that a firm has future marginal productivity of capital given by MPK-A(100-K). The price of capital (machine) is $2
C) If the TFP increases to 2. i.e. A-2, then what is the gross investment (still assume the firm currently has 10 machines)?
1. Assume that a firm has future marginal productivity of capital given by MPK-A(100-K). The price of capital (machine) is $20,000, the real interest rate is 10%, and capital depreciates at a 10% rate. Assume further that each unit of output sells for $50. A) Calculate the user cost of the capital (in real term) that the firm faces. B) Assume A-1, then calculate the desired capital stock. What is the firm's gross investment if the firm currently has 10 machines? (Assume the machines depreciate at the same rate as the usual rate above.)
C) If the TFP increases to 2. i.e. A-2, then what is the gross investment (still assume the firm currently has 10 machines)?

Answers

Here, we have: warnival Prodvetivity of capital : MPK = A (100-K). price of capital $20,000 (+ PK). Real interest rate : r =Now, it is given that K = 10 Gross In westurent of a firm is the sum of Net investment and the replacement of tem depriciates:, Gross Investureet = [upk-c7+ 8K = (180–80] + 1 = 100+1=101 Thus, Giross investment when A = 2 and K = 10, is 101 units of

.

Similar Solved Questions

1 answer
Write a C program to implement matrix multiplication operations. First, you need to prompt the user...
Write a C program to implement matrix multiplication operations. First, you need to prompt the user for the size of both matrix. Then take inputs for both matrices and perform matrix multiplication operation. Finally, print the resulting matrix into the output....
1 answer
Assume the Residential Division of Kindle Faucets had the following results last year Net sales revenue...
Assume the Residential Division of Kindle Faucets had the following results last year Net sales revenue Operating income Average total assets Management's target rate of retum $ 17,340,000 2,601,000 5,100,000 15% What is the division's RI? O A. $(1,873,500) OB. $1,873,500 O C. 1,836,000 OD. ...
1 answer
6TH question 5. A 6-in.-diameter well that fully penetrates a 40-ft-thick open aquifer is pumped at...
6TH question 5. A 6-in.-diameter well that fully penetrates a 40-ft-thick open aquifer is pumped at a rate of 100 gpm. The drawdown in the well is 22 ft when a steady water level is established. The drawdown in a well 152 ft distant is 12 ft. Estimate the coefficient of permeability of the soil depo...
1 answer
An Q: Gulf Shipping Company Balance Sheet As of January 24, 2020 (amounts in thousands) 14,300...
An Q: Gulf Shipping Company Balance Sheet As of January 24, 2020 (amounts in thousands) 14,300 Accounts Payable 4,100 Debt Sc Cash 1,900 3,200 Accounts Receivable 5,800 Other Liabilities 14,800 Total Liabilities 4,000 9,100 Inventory Property Plant & Equipment Other Assets 700 Paid-In Capital 7,...
1 answer
What is the final amount in total equity? The T-accounts below summarize transactions of Gulf Shipping...
What is the final amount in total equity? The T-accounts below summarize transactions of Gulf Shipping Company from February 22 to February 25, 2020: Cash PP&E, Net Balance Balance 14,300 Accounts Payable Balance 1,900 Other Liabilities Balance 4,000 14,800 Debt Accounts Receivable Balance 4...
1 answer
6· -/1 points CJ9 19.P 019 My Notes Ask Your Teacher point charges arranged in a...
6· -/1 points CJ9 19.P 019 My Notes Ask Your Teacher point charges arranged in a rectangle. The value of q s 9.45 μ , a d the is a cedis 19 m. Find tinetotal electric potential a 0 ation The drawing shows s of the rectangle whi hs at the center +7q +3q +-5q 5q 3q +7q Additional Materials S...
1 answer
2. If the wheels at A are locked and rotating freely at B, calculate the friction...
2. If the wheels at A are locked and rotating freely at B, calculate the friction and normal force under the wheels at A. Assume it is not sliding. 4.45 630 Answer(s):...
1 answer
A freshly brewed cup of coffee has temperature 95°C in a 20°C room. When its temperature...
A freshly brewed cup of coffee has temperature 95°C in a 20°C room. When its temperature is 73°C, it is cooling at a rate of 1°C per minute. When does this occur? (Round your answer to two decimal places.) min Need Help? Read...
1 answer
What is the correct way for a project manager to invite line managers to attend team...
What is the correct way for a project manager to invite line managers to attend team meetings?...
1 answer
Ativan 1 mg IV push the med comes in 2 mg per mL, how many mL...
Ativan 1 mg IV push the med comes in 2 mg per mL, how many mL do you give? If cephalexin 500 mg is prescribed QID x10 days, how many grams will  the patient receive over the entire course?...
1 answer
Two plane mirrors are at an angle of θ1 = 69.4° with each other as in...
Two plane mirrors are at an angle of θ1 = 69.4° with each other as in the side view shown in the figure below. If a horizontal ray is incident on mirror 1, at what angle θ2 does the outgoing reflected ray make with the surface of mirror 2?...
1 answer
Brief Exercise 14-13 Your answer is partially correct. Try again. Bridgeport Corporation issued a 5-year, $84,000,...
Brief Exercise 14-13 Your answer is partially correct. Try again. Bridgeport Corporation issued a 5-year, $84,000, zero-interest-bearing note to Garcia Company on January 1, 2020, and received cash of $84,000. In addition, Bridgeport agreed to sell merchandise to Garcia at an amount less than regula...
1 answer
On a summer evening has probably heard crikckets. Did you know that it is possible to use the cri...
on a summer evening has probably heard crikckets. Did you know that it is possible to use the cricket as a thermometer? Crickets tend to chirp more frequently as temperatures increase. This representing chirps per second and y is a random variable re i George W. Pierce, a physics professor at Harvar...
1 answer
FIFO EUP In manufacturing its products, Trevano Corp. adds all direct material at the beginning of...
FIFO EUP In manufacturing its products, Trevano Corp. adds all direct material at the beginning of the production process. The company's direct labor and overhead are considered to be continuously at the same degree of completion. The company uses the FIFO method of process costing, September pr...
1 answer
They need to placed in order and have the spaces filled in. Please and thank you....
They need to placed in order and have the spaces filled in. Please and thank you. Fill in the blanks to accurately describe the evolution of mammals. Then, arrange the events in chronological order to demonstrate the timeline for these events. Jurassic Drag the text blocks below into their Correct o...
1 answer
In an economy, when disposable income increases from $400 to $500, consumption expenditure increases from $420...
In an economy, when disposable income increases from $400 to $500, consumption expenditure increases from $420 billion to $500. Calculate the marginal propensity to consume, the change in saving, and the marginal propensity to save. The marginal propensity to consume is 0.80. >>> Answer to ...
1 answer
In the balanced equation for the reaction of prospe WILT IUNIE LU pruuuus H3PO2 and iodide...
In the balanced equation for the reaction of prospe WILT IUNIE LU pruuuus H3PO2 and iodide under acid conditions, how many water molecules are present on the reactant side of the equation? The unbalanced redox equation is: PH3 + 12 --> H2PO2 + 1...
1 answer
How do you factor #x^3+8y^3#?
How do you factor #x^3+8y^3#?...