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

Suppose that a candy maker owns a building and is renting part of the building's space to a doctor. further suppose that because the candy maker is the owner, he has the right to make noise during the day while he makes candy. while the doctor cannot insist on a quiet environment, the doctor could move to a quieter building. however, rent in the next best building is $350/month more than rent in the noisy building. the candy maker can adopt a new technology that eliminates the noise for $275/month. given this situation, can the doctor find a private solution with the candy maker that will make both better off?