Adsl company has made an equipment investment of $40 million with the expectation that it will be recovered in 10 years. the company has a marr based on a real rate of return of 12% per year. if inflation is 7% per year, how much must the company make each year (a) in constant-value dollars, and (b) in future dollars, to meet its expectation?

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan