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Near new car is expected to earn an economic profit of

Near new car is expected to earn an economic profit of $20,000 each year for the next years. the discount rate is 10 percent. Assume profits are received at the end of the year.

1. What is the present value of the firm?

2. How is that present value affected if a 15 percent discount rate is used?

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Macroeconomics: Near new car is expected to earn an economic profit of

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Macroeconomics: Near new car is expected to earn an economic profit of

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