Public Finance (The McGraw-Hill Series in Economics)
10th Edition
ISBN: 9780078021688
Author: Harvey S Rosen, Ted Gayer
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 8, Problem 4DQ
Suppose that you are planning to take a year vacation to bike across the United States. Someone is willing to you a new bicycle for $500. At the end of the year, you expect to resell the bicycle for $350. The benefit to you of using the bicycle is the equivalent of $170.
- What is the
internal rate of return ? - If the discount rate is 5 percent, should you buy the bicycle?
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The maturity value of an $35,000 non-interest-bearing, simple discount 4%, 120-day note is:
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,905 at 10% for 4 years. Use ordinary interest as needed.
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Chapter 8 Solutions
Public Finance (The McGraw-Hill Series in Economics)
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