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3 years ago

If the consumption function is defined as C = 5,500 + 0.9Y, what is the

Business

1 answer:

Nimfa-mama [501]3 years ago

8 0

Answer:

Option B ($5,500) is the appropriate choice.

Explanation:

The given expression is:

⇒ $C = 5,500 + 0.9Y$

At the zero (0) level of income, the consumption would be the Autonomous consumption.

then,

Y = 0

On substituting the value of "Y" in the given expression, we get

⇒ $C=5,500+0.9(0)$

⇒ $=5,500+0$

⇒ $=5,500$ (%)

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2 years ago

A new highway is to be constructed.

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Answer:

Desing B

Total Present worth $ 502.485,35‬

Annual worth: $ 49,722.003

Option 2:

Total Present worth $ 666.441,33‬

Annual worth: $ 53,845.798

Explanation:

<h2>Desing A</h2>

$85 x 5280 = 448,800

$4 x 3 x 5280 = 63,360

$8000 x 4 = 32,000

total cost: 544,160‬

Annual cost:

11,800 + 300 = 12,100

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$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 12,100.00

time 16

rate 0.06

$12100 \times \frac{1-(1+0.06)^{-16} }{0.06} = PV\\$

PV $122,281.3328

Present worth:

total cost to construct 544,160‬ + maintenance $122,281.33 = 666.441,33

Annual worth:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 544,160

time 16

rate 0.06

$544160 \div \frac{1-(1+0.06)^{-16} }{0.06} = C\\$

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<h2>Desing B</h2>

a mile is equivalent to 5,280 foot

paviment $40 x 5,280 = $ 211,200

sood ditched 2 per foot x 5,280 foot per mile x $1.40 = $ 12,038.4

pipe culvert 2,200 x 2 = 4,400

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PV of maintenance:

replacement 2,400 x 2 = 4,800 (in 8 years)

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $4,800.0000

time 8.00

rate 0.06000

$\frac{4800}{(1 + 0.06)^{8} } = PV$

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maintenance $2,900

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PV of this annuity over 16 years:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

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rate 0.06

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