Suppose technical change makes it cheaper for cable television suppliers to supply their service. The capture theory would predict that the regulators would force the firms to pass the savings on to consumers in the form of lower prices. force the firms to pass some of the savings on to consumers and permit them to keep some of the savings for themselves. force the firms to pass the savings on to consumers in the form of better service. allow the firms to capture the savings and would lower price only if the firms asked them to.

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan