Answer:
Cash in-flow in the last year.
Explanation:
Salvage value, also known as residual value, is the amount that you receive from sale of Property, Plant, and Equipment at the end of useful life. When computing the NPV of any project, we consider all the relevant cash flows of that project. Since, $45,000 will be received when project ends from sale of Fixed asset, so this figure will be treated as Cash in-flow and discounted.
Answer:
a. shortage at the former equilibrium interest rate. This shortage would lead to a rise in the interest rate.
Explanation:
The equilibrium in the market for loanable funds is achieved when the quantities of loans that borrowers want are the same as the quantity of savings that savers provide. The interest rate adjusts to make these equal.
All you have to do is substitute the y values to the equation to solve the corresponding c values which stands for the consumption levels. To illustrate the solution,
when y = 100,
C = <span>120+0.65(100)
C = 185
</span>when y = 120,
C = 120+0.65(120)
C = 198
when y = 125,
C = 120+0.65(100)
C = 201.25
And so on and so forth. The answers would be:
y C
100 185
120 198
125 201.25
140 211
80 172
115 194.75
145 214.25
150 217.5
166 227.9
200 250
