You are given the following long-run annual rates of return for alternative investment instruments: u. s. government t-bills 3.10 % large-cap common stock 11.25 long-term corporate bonds 5.65 long-term government bonds 4.65 small-capitalization common stock 13.25 the annual rate of inflation during this period was 2 percent. compute the real rate of return on these investment alternatives. do not round intermediate calculations. round your answers to two decimal places.

Wisconsin snowmobile corp. is considering a switch to level production. cost efficiencies would occur under level production, and after tax costs would decline by $36,000, but inventory would increase by $300,000. wisconsin snowmobile would have to finance the extra inventory at a cost of 13.5 percent. a. determine the extra cost or savings of switching over to level production. should the company go ahead and switch to level production? b how low would interest rates need to fall before level production would be feasible?