diff --git a/docs/book/content/CCC_guide.md b/docs/book/content/CCC_guide.md index d18b25bb..dbcb924b 100644 --- a/docs/book/content/CCC_guide.md +++ b/docs/book/content/CCC_guide.md @@ -38,7 +38,7 @@ r^{'}_{m,j}-\pi = f_{m,j}\left[i-\pi\right] + (1-f_{m,j})E_{j}, where $f_{m,j}$ represents the fraction of the marginal investment financed with debt by firms in industry $m$ and of tax entity type $j$. In addition to the cost of capital, the `Cost-of-Capital-Calculator` reports two related measures: -* The user cost of capital (ucc): $ucc_{i,m,j} = \rho_{i,m,j} + delta_{i}$ +* The user cost of capital (ucc): $ucc_{i,m,j} = \rho_{i,m,j} + \delta_{i}$ * The tax wedge, which is the difference between the before tax rate of return (which is equivalent to the cost of capital for marginal investments) and the after-tax return top savings. The tax wedge = $\rho_{i,m,j}-s_{m,j}$ (sec:METR)= @@ -86,14 +86,14 @@ where $phi$ are the fraction of inventories that use FIFO accounting and $\rho_{ ```{math} :label: eqn:inventory_fifo -\rho_{FIFO} = \frac{1}{Y_v} log(\frac{e^{(Y_v} - u_{j}}{(1 - u_{j})} - \pi, +\rho_{FIFO} = \frac{1}{Y_v} ln \left(\frac{e^{rY_v} - u_{j}}{(1 - u_{j})} \right) - \pi, ``` and ```{math} :label: eqn:inventory_lifo -\rho_{LIFO} = \frac{1}{Y_v} log(\frac{e^{(r_{m,j}-\pi)Y_v} - u_{j}}{(1 - u_{j})} - \pi, +\rho_{LIFO} = \frac{1}{Y_v} ln \left(\frac{e^{(r_{m,j}-\pi)Y_v} - u_{j}}{(1 - u_{j})} \right) - \pi, ``` where $Y_{v}$ is the average number of years that inventories are held. @@ -177,7 +177,7 @@ Some investment decisions are discrete: build the new plant or not, pursue this ```{math} :label: eqn:eatr -EATR = \left(\frac{p_{i,m,j} - rho_{i,m,j}}{p_{i,m,j}}\right)u_{j} + \left(\frac{\rho_{i,m,j}}{p_{i,m,j}}\right)METR_{i,m,j}, +EATR = \left(\frac{p_{i,m,j} - \rho_{i,m,j}}{p_{i,m,j}}\right)u_{j} + \left(\frac{\rho_{i,m,j}}{p_{i,m,j}}\right)METR_{i,m,j}, ``` where $p_{i,m,j}$ is the rate of profit on the project. Note that the $EATR$ is equal to the $METR$ for marginal projects - those who's rate of profit is equal to the cost of capital.