PLEASE SHOW THE DETAILS! THANKS A LOT! Bob the Builder is considering purchasing

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PLEASE SHOW THE DETAILS! THANKS A LOT!

Bob the Builder is considering purchasing new diggers. The purchase price is $20000 per digger. The real interest rate is 4% per year and the depreciation rate is 10% per year. It also costs $2000 to insure and fuel a digger for one year. The additional output per digger added to the fleet is $12000/K where K is the number of diggers. What is Bobs desired capital stock? If Bob already has one digger at the beginning of the year, what is his gross and net investment?

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PLEASE SHOW THE DETAILS! THANKS A LOT! Bob the Builder is considering purchasing

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