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A new assembly line robot with a price tag of $2.5 million is expected to depreciate...

A new assembly line robot with a price tag of $2.5 million is expected to depreciate by 3% at the end of next year. The real interest rate is 2.5%. What is the user cost of the robot for one year?

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Answer #1

User cost f the robot for one year = 2,500,000 * (0.03 + 0.025)

                                                      = $137,500

               

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