You Have Just Purchased a New VCR to Show Videos

question 24

Multiple Choice

You have just purchased a new VCR to show videos to your customers.The VCR cost $500,and you depreciate the machine at a rate of 25% each year.You can borrow money from the bank at 10%,or receive 6% for depositing money at the bank.The expected inflation rate in the coming year is 5%.You borrowed money from the bank to purchase the VCR.The firm's user cost of capital for the first year is

• A)$130.
• B)$150.
• C)$155.
• D)$175.

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Definitions:

Linear Acceleration

A measure of the rate of change of velocity of an object, with respect to time, in a straight line.

Vestibular Fibers

These are nerve fibers associated with the vestibular system, which helps in the process of balance and spatial orientation.

Vestibular Canal

A part of the inner ear that contributes to the body's sense of balance and spatial orientation.

Organ of Corti

The structure within the inner ear of vertebrates that contains receptor cells that sense sound vibrations.