The board of directors of the Estelar Company in Brazil was presented with the following list of investment projects for implementation in 2016: Project Factory in Buenos Aires, Argentina Factory in Caracas, Venezuela A new headquarters in Rio de Janeiro New logistics software A new distribution warehouse A new fleet of delivery trucks Total Cost (Brazilian Reais Converted to Millions of U.S. Dollars) $20 19 4 6 5 4 Estimated Rate of Return Note: Carefully follow the instructions above and only draw the required objects. You would recommend that Estelar should invest S 11% 14 10 17 20 9 Using the graph on the right, sketch total investment as a function of the interest rate (with the interest rate on the y-axis). 1.) Using the line drawing tool, graph the investment function. The investment function will be comprised of six line segments (D₁, D₂, D3, D4, D5. and Dg). Draw each of the line segments, labeling each with the provided labels. million. (Enter your response as an integer.) Interest rate, r 26- 24 22- 20 18- 16- 14- 12- 10 & 6 4- 2- 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 58 60 64 68 72 Total investment (millions of dollars) Q Q

The board of directors of the Estelar Company in Brazil was presented with the following list of investment projects for implementation in 2016: Project Factory in Buenos Aires, Argentina Factory in Caracas, Venezuela A new headquarters in Rio de Janeiro New logistics software A new distribution warehouse A new fleet of delivery trucks Total Cost (Brazilian Reais Converted to Millions of U.S. Dollars) $20 19 4 6 5 4 Estimated Rate of Return Note: Carefully follow the instructions above and only draw the required objects. You would recommend that Estelar should invest S 11% 14 10 17 20 9 Using the graph on the right, sketch total investment as a function of the interest rate (with the interest rate on the y-axis). 1.) Using the line drawing tool, graph the investment function. The investment function will be comprised of six line segments (D₁, D₂, D3, D4, D5. and Dg). Draw each of the line segments, labeling each with the provided labels. million. (Enter your response as an integer.) Interest rate, r 26- 24 22- 20 18- 16- 14- 12- 10 & 6 4- 2- 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 58 60 64 68 72 Total investment (millions of dollars) Q Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The board of directors of the Estelar Company in Brazil was presented with the following list of investment projects for
implementation in 2016:
Total Cost (Brazilian Reais Converted to
Millions of
U.S. Dollars)
Estimated Rate of Return
Project
Factory in Buenos Aires, Argentina
Factory in Caracas, Venezuela
A new headquarters in Rio de Janeiro
New logistics software
A new distribution warehouse
A new fleet of delivery trucks
Using the graph on the right, sketch total investment as a function of the interest rate (with the interest rate on the y-axis).
1.) Using the line drawing tool, graph the investment function. The investment function will be comprised of six line segments
(D₁, D₂, D3, D4, D5, and De). Draw each of the line segments, labeling each with the provided labels.
$20
19
4
6
5
4
11%
14
10
17
20
9
Note: Carefully follow the instructions above and only draw the required objects.
You would recommend that Estelar should invest $____ million. (Enter your response as an integer.)
+
Interest rate, r
26-
24-
22-
20
18-
16-
to 14.
12-
10
8
6-
4-
2-
0
0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72
Total investment (millions of dollars)
Q
G

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