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Social Science Clinic => Economics => Topic started by: altibaby on Apr 19, 2019

Title: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of ...
Post by: altibaby on Apr 19, 2019

Question 1

Assume the current interest rate is 25%. The present value of $2,000 to be received in one year would be

◦ $1,000.
◦ $1,200.
◦ $1,600.
◦ $1,800.

Question 2

Tomʹs Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of $350 each year for two years. What is the present discounted value of the expected profits from this investment if the interest rate is 4%?

◦ $323.59
◦ $480.77
◦ $660.13
◦ $673.08

Title: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of ...
Post by: fromAlphatoOmega22 on Apr 19, 2019

Answer 1

$1,600.

Answer 2

$660.13

Title: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of ...
Post by: altibaby on Apr 19, 2019

Thank you!

Title: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits of ...
Post by: fromAlphatoOmega22 on Apr 19, 2019

Always glad to help...

Title: Re: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits
Post by: Richard Pansire on Mar 7, 2020

thank you!

Title: Re: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits
Post by: zxczxczxc on Apr 11, 2020

thank you!

Title: Re: Toms Donuts can invest in a new espresso machine that costs $500 and will yield expected profits
Post by: Lord Grymm on Jul 6, 2020

Thank you