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A businessman is considering how many limousines to purchase when he starts up a limousine service.Below are his estimates of the number of limousine rentals the service will make during a year,depending on the number of limousines available.
After paying all non-interest expenses,the owner expects to net $10 per rental.Each limousine costs $50,000.How many limousines should he purchase if the real interest rate is 5.5%?
Discount
A fee charged when someone buys a note before maturity. With regard to bonds, a bond sells at a discount if the market value becomes less than the face value.
Premium Price
A pricing strategy where goods or services are sold at a higher price point due to perceived advantages, often related to quality or status.
Bond Quoted
The price or interest rate at which a bond is currently being sold or bought in the market.
Dollar Amount
A numerical monetary value denoted in the currency of the United States.
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