Mr. jernigan owns a piece of land on which he grows corn. corn production annually requires $6 comma 0006,000 in seed, $3 comma 0003,000 in fertilizer, and $6 comma 0006,000 in pesticides. mr. jernigan uses his own labor to grow the corn and therefore hires no workers. if mr. jernigan did not use his time to grow corn, he would instead be able to sell insurance, earning $25 comma 00025,000 per year. suppose another farmer has just offered to pay mr. jernigan rent of $20 comma 00020,000 per year for use of the land. if mr. jernigan refuses to rent the land to another farmer, then what will be his accounting costs from farming corn himself on his land? what will be his economic costs?

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?