Ferox Engineering Company intends to sign a contract obligating it to provide bridge inspection services for five years. In return, Ferox will receive $5,000 initially and $10,000 at the end of each of the five years of service. Ferox uses a 12% Discount rate. If the annual inflation rate will be 4%, what is the inflation-adjusted present value of the contract

$37,400

Explanation:

The computation of the inflation-adjusted present value of the contract is shown below:

Given that

At the zero year = $5,000

From 1st to 5th year = $10,000

Discount rate = 12%

Inflation Rate = 4%

Now

Adjusted discount rate is

= 12% + 4% + (.12 × .04)

= 16.48%

And,  

Present Worth is

= $5,000 + $10,000 (P/A, 16.48%, 5)

= $5000 + $10,000 (3.2358)

= $37,358

= $37,400

answer: e

explanation:

answer: marginal utility of the fourth brownie is 0.

explanation: marginal utility is the addtional utility gained from the consumption of one more unit of a good. it is given by,

so, marginal utility at the 4th unit will be given by

since, the values are not given here, you can simply find marginal utility at fourth unit by subtracting total utility at 3rd unit from total utility at 4th unit.