Calculate the user cost of capital of a machine that costs $5,000 and depreciates at a rate of 25%, when the nominal interest rate is 10% and the expected inflation rate is 5%.
(a) $150
(b) $500
(c) $1500
(d) $5000
Answer: C
Calculate the user cost of capital of a machine that costs $5,000 and depreciates at a rate of 25%, when the nominal interest rate is 10% and the expected inflation rate is 5%.
(a) $150
(b) $500
(c) $1500
(d) $5000
Answer: C
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