Macroeconomics
Macroeconomics
4th Edition
ISBN: 9780393602487
Author: Jones, Charles I.
Publisher: W. W. Norton & Company
Question
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Chapter 17, Problem 1E

(a)

To determine

The use cost of capital without any changes.

(b)

To determine

The user cost of capital when the corporate tax rate raises to 35 percent.

(c)

To determine

The user cost of capital when the interest rate increases from 2 to 4 percent.

(d)

To determine

The user cost of capital when the corporate income tax is 35 percent and the interest rate is 4 percent.

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