question archive Cost of Antique Furniture
Cost of Antique Furniture
Subject:EconomicsPrice:2.87 Bought7
Cost of Antique Furniture. Amy owns antique furniture that she bought for $10,000 ten years ago. Your job is to compute Amy's cost of owning the furniture for the next year. To compute the cost, you need two bits of information:
O A. the expected interest rate for the next year and the current value of the furniture.
O B. the expected interest rate for the next year and the cost of comparable new furniture.
O c. the interest rates for the last ten years and the expected interest rate for the next year
O D. the interest rates for the last ten years and the current value of the furniture.
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Answer:
The current value of the furniture can be calculated if we know the interest rates over the last 10 years. After calculating the current value, the expected interest rate for the next year would be needed to calculate the value of the furniture in the next year. This would be Amy's cost of owning the furniture for the next year.
So the answer is C) the interest rates for the last ten years and the expected interest rate for the next year.
