Solved

An Individual Has Income of $10,000 in Period 0 and $25,000

Question 1

Essay

An individual has income of $10,000 in period 0 and $25,000 in period 1.An investment opportunity that costs $10,000 in period 0 is worth $10,500 in period 1.The market interest rate is 8%.What is the maximum possible consumption in period 1 if the individual consumes $20,000 in period 0 and the individual follows the NPV rule?

Correct Answer:

verifed

Verified

Related Questions