Calculate the user cost of capital of a machine that costs $100,000 and depreciates at a rate of 25%, when the nominal interest rate is 4% and the expected inflation rate is 1%.
a. $29,000
b. $3,000
c. $28,000
d. $25,000
Answer: C
FIN 201
- Whether real seignorage revenue increases when the rate of money growth increases depends on whether
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