Question

Marginal efficiency of capital how it determines investment

Answer 1

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❏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.

❏ It is calculated as the profit that a firm is expected to earn considering the cost of inputs and the depreciation of capital.

Answer 2

Answer :

❏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.

❏ It is calculated as the profit that a firm is expected to earn considering the cost of inputs and the depreciation of capital.

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