Question

Explain in detail, the marginal efficiency of capital.​

Answer 1

Answer:

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Explanation:

The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income. ... The MEC is the net rate of return that is expected from the purchase of additional capital.

Answer 2

Capital efficiency (MEC) is the discount rate that can measure the value of a fixed asset and its current reduced amount of expected earnings.

It is calculated as the profit that the company is expected to earn by considering the costs of input and depreciation.

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