QUESTION TWO [20 MARKS]
a) Let us consider the microeconomic analysis of a single profit-maximizing firm deciding
whetheror not to undertake an investment. Suppose a machine whichhas a known life of only
one year is expected to yield N$25000.00 at the end of the year. The machine presentcost is
N$19000.00 and a rate of interest is 4%.
i. Calculate the rate of return [3marks]
ii. Use the answer in part i) to determine if the investment is profitable or not.
QUESTION TWO [20 MARKS] a) Let us consider the microeconomic analysis of a single profit-maximizing firm deciding whetheror not to undertake an investment. Suppose a machine which has a known life of only one year is expected to yield N$25000.00 at the end of the years
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