Answer:
The question is incomplete since we are not told if the capital gain is a short or long term gain. So I will answer the question in both possible scenarios.
Short term capital gains:
They are taxed as ordinary income, so the net gain = $35,000 - $7,000 = $28,000
Net gain after taxes = $28,000 x (1 - 53.31%) = $13,073.20
Long term capital gains:
They are taxed at a much lower rate that ranges from 0 to 20%. In this case, Christopher is probably taxed at 20%.
Net gain after taxes = $28,000 x (1 - 20%) = $22,400
Explanation:
create a development plan for a business management student
What is a Professional Development Plan?
A Professional Development Plan (PDP), also known as an Employee Development Plan or an Individual Development Plan, is used to document career goals and set out a strategy on how to meet them.
Creating a PDP takes time and planning. But, writing and implementing a PDP can help you to identify and develop the professional skills needed to reach your goals, and can keep you on the track to success. It’s an important process that helps you achieve your potential, reach your goals and take charge of your professional development.
Now is the time to start thinking about where you want your future to take you.
How to Write a Professional Development Plan
There are 9 steps to completing a PDP:
Assess where you are now.
Identify your specific career goals.
Gather information.
Identify what professional skills you already have and which you need to work on.
Choose how you will accomplish your goals.
Develop a timeline for accomplishing your specific targets and goals.
Write it all down.
Evaluate your plan.
Measure your progress.
Answer:
1)Set your destination. ...
2)Focus your approach. ...
3)Define your marketing channels. ...
4)Choose KPIs and create dashboards to keep you on track. ...
5)Define your sales process to align with your customer's needs. ...
6)Determine resource needs. ...
7)Share your business development plan with stakeholders.
Sheffield Corp. is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6450000 on March 1, $5350000 on June 1, and $8250000 on December 31. Sheffield Corp. borrowed $3250000 on January 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 8%, 3-year, $6410000 note payable and an 9%, 4-year, $12750000 note payable. What are the weighted-average accumulated expenditures
Answer:
$8,495,833
Explanation:
Calculation of weighted-average accumulated expenditures
Date Payments Funds used Annualized Amount
Mar 1 $6450000 10/12 $6450000*10/12 $5,375,000
Jun 1 $5350000 7/12 $5350000*7/12 $3,120,833
Dec 31 $8250000 0/12 $$8250000*0/12 $0
Weighted Average Expenditures $8,495,833
Explain why it is difficult to validate the relationships between internal product attributes, such as cyclomatic complexity and external attributes, such as maintainability.
Answer and Explanation:
The difficulty occurs as of the external attributes like the maintainability is some how related to the developers and users who experiences the software it could be impacted by various things like their experiences, education, etc also they are not dependent upon the cyclomatic complexity. In addition to this, for validating these kind of attributes, here are some internal attributed like size, complexity, documentation that could be determined
Use the following information for Jake Company: Sales Revenue .......................................... $2,000,000 Interest/Dividend Revenue .................. 50,000 Cost-of-Goods- Sold ............................ 1,000,000 Selling and Administrative Expenses.. 200,000 Loss on Discontinued Operations ..... 100,000 Unearned Revenue .............................. 100,000 What is Net Income for the Year Ended December 31, 2020 (ignore taxes)
Answer: $750,000
Explanation:
Net Income
Sales Revenue 2,000,000
Interest/ Dividend Revenue 50,000
2,050,000
Cost of Goods sold (1,000,000)
Selling and Admin expenses (200,000)
Loss on Discontinued (100,000)
Net Income $750,000
Carla Vista Company purchased equipment that cost $3980000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $122000 residual value. Carla Vista uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Carla Vista is subject to a 40% tax rate. Before the correction was made and before the books were closed on December 31, 2022, retained earnings was understated by
Answer:
$1,800,402
Explanation:
Cost = $3,980,000
Lifespan = 9 yrs
Residual Value = $122,000
Depreciation per year = (Cost - Residual Value)/life
Depreciation per year = (3,980,000 - 122,000)/9
Depreciation per year = 3,858,000 / 9
Depreciation per year = $428,667
So, Tax saved = 40% of $428,667 = $171,467
Depreciation per year not considered = 3 yrs * $428,667 = (+)$1,286,001
Tax saved due to Depreciation = 3 yrs * $171,467 = (+)$514,401
So, retained earnings was understated by $1,286,001 + $514,401 = $1,800,402
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,000. The division sales for the year were $1,047,000 and the variable costs were $860,000. The fixed costs of the division were $190,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Answer:
$130,000 decrease
Explanation:
Multiple Choice $57,000 decrease $130,000 decrease $54,000 decrease $187,000 increase $187,000 decrease
Calculation of Financial advantage / Disadvantage
Decrease in contribution margin $187,000
(1,047,000-860,000)
Decrease in fixed expenses $57,000
(190000*30%)
Decrease in Net Operating Income $130,000 (Financial disadvantage)
The standard costs and actual costs for direct materials for the manufacture of 3,000 actual units of product are as follows: Standard Costs Direct materials 1,040 kilograms at $8.75 Actual Costs Direct materials 2,000 kilograms at $8.00 The direct materials price variance is a.$2,750 favorable b.$2,750 unfavorable c.$1,500 unfavorable d.$1,500 favorable
Answer:
$2,250 favorable
Explanation:
The direct material price variance is computed as;
= ( Standard price - Actual price ) × Actual quantity
Given that;
Standard price = $8.75
Actual price = $8
Actual quantity = 3,000 units
Direct material price variance
= ( $8.75 - $8 ) × 3,000
= ( $0.75 ) × 3,000
= $2,250 favorable
A company purchased property for a building site. The costs associated with the property were: Purchase price $ 184,000 Real estate commissions 15,900 Legal fees 1,700 Expenses of clearing the land 2,900 Expenses to remove old building 1,900 What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building
Answer: The portion of these costs that will be allocated to the cost of the land is $206,400 and the portion that should be allocated to the cost of the new building is 0.
Explanation:
The following information can be gotten from the question:
Purchase price = $184,000
Real estate commissions = $15,900
Legal fees = $1,700
Expenses of clearing the land = $2,900
Expenses to remove old building = $1,900
Therefore, the portion of these costs should be allocated to the cost of the land will be:
= $184,000 + $15,900 + $1,700 + $2,900 + $1,900
= $206,400
It should also be noted that building cost will be 0.
For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): Present ValueYears Interest RateFuture value$ 13 7% $15,251 4 13 49,557 29 14 884,073 40 9 548,164
Answer:
Present Value = Future Value / ( 1 + interest rate) ^ years
1. Present Value = 15,251 / ( 1 + 7%)¹³
= $6,328.62
2. Present value = 49,557 / (1 + 13%)⁴
= $30,394.24
3. Present value = 884,073 / ( 1 + 14%)²⁹
= $19,780.96
4. Present Value = 548,164 / (1 + 9%)⁴⁰
= $17,452.22
Famtrk153 Corp. is a popular car-wash operation that measures its activity in terms of number of cars washed. Last month, the budgeted level of activity was 1,140 cars washed and the actual level of activity was 1,130 cars washed. The cost formula for the washing expenses is $3.80 per car washed plus $21,000 per month. (ID#11659) The actual Famtrk153's washing expense was $21,700. Q) What was the Famtrk153's spending variance for the washing expenses last month?
Answer:
the spending variance is $3,594 favorable
Explanation:
The computation of the spending variance is as follows
Budgeted Expense is
= 1,130 cars × $3.80 per car + $21,000
= $4,294 + $21,000
= $25,294
And, the actual expese is $21,700
So, the spending variance is
= $25,294 - $21,700
= $3,594
Hence, the spending variance is $3,594 favorable
Pexura731 Corporation conducts get-rich-quickly workshops and uses two measures of activity, classes and students, in the cost formulas in its internal financial and operating reports. The cost formula for workshops is $450 per month plus $105 per class plus $25 per student. Pexura731 expected its activity in January to be 15 classes and 125 students, but the actual activity was 9 classes and 108 students. (ID#92589) The actual cost for workshops in January was $4,450. Q) What was Pexura731's spending variance for workshops in January?
Answer:
355 (Unfavorable)
Explanation:
Budgeted Cost for Actual Output = $450 + ($105 * Actual No of Classes) + ($28 *Actual No of Student)
Budgeted Cost for Actual Output = $450 + ($105*9) + ($25*108)
Budgeted Cost for Actual Output = $450 + $945 + $2,700
Budgeted Cost for Actual Output = $4,095
Actual Cost for Actual output = $4,450
Spending Variance = Actual Cost for Actual output - Budgeted cost for Actual Output
Spending Variance = $4,450 - $4,095
Spending Variance = 355 (Unfavorable)
It is Unfavorable as actual expenditure is more than what is budgeted.
Peyton sells an office building and the associated land on May 1 of the current year. Under the terms of the sales contract, Peyton is to receive $1,867,200 in cash. The purchaser is to assume Peyton's mortgage of $1,120,320 on the property. To enable the purchaser to obtain adequate financing, Peyton is to pay the $22,406 in points charged by the lender. The broker's commission on the sale is $74,688. What is Peyton's amount realized
Answer: $2,890,426
Explanation:
= Cash received + Mortgage assumed - Points paid by Peyton - Broker's ,commission
= 1,867,200 + 1,120,320 - 22,406 - 74,688
= $2,890,426
A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $ 445,000 Debit Allowance for Doubtful Accounts 1,350 Debit Net Sales 2,200,000 Credit All sales are made on credit. Based on past experience, the company estimates 2.0% of its net sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Answer:
Dr Bad Debt Expense $44,000
Cr Allowance for Doubtful Accounts $44,000
Explanation:
Preparation of What adjusting Journal entry should the company make at the end of the current year to record its estimated bad debts expense
Based on the information given the adjusting Journal entry that the company should make at the end of the current year to record its estimated bad debts expense will be:
Dr Bad Debt Expense $44,000
Cr Allowance for Doubtful Accounts $44,000
(Net Sales 2,200,000*Estimated 2.0% of net sales)
(Being to record estimated bad debts expense)
The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents $ 10,319 Accounts receivable 79,922 Merchandise inventories 69,862 Prepaid expenses 6,000 Accounts payable $ 16,850 Notes payable 96,138 Other current liabilities 11,400 If net credit sales for the current year were $602,000, the firm's days' sales uncollected for the year is: (Use 365 days a year.)
Answer:
49 days
Explanation:
Account receivable turnover ratio = Net credit sales / Accounts receivable
Account receivable turnover ratio = $602,000 / $79,922
Account receivable turnover ratio = 7.53
Average collection period = 365/7.53
Average collection period = 48.47277556440903
Average collection period = 49
Thus, firm’s sales uncollected for year is 49 days.
The ship Audie Murphy leaves the New York Port with a ship load of GMC pick-up trucks bound for the Port of Istanbul, Turkey. A fire breaks out aboard the ship and destroys more than thirty GMC pick-up trucks. After an investigation it has been unable to determine the cause. Who is financially responsible for the damage
Answer: c. The Owner of the ship - Jack Palace
Explanation:
The investigation was unable to determine the cause of the fire. While this does not clear any party, it does not lay the blame on any party either.
In such a case the financial responsibility will fall on the company operating the transport company which in this case is Jack Palace who is the owner of the ship.
Recently, Galaxy Corporation lowered its allowance for doubtful accounts by reducing bad debt expense from 2% of sales to 1% of sales. Ignore taxes. What are the immediate effects on operating income
Answer:
Lower bad debt expenses will result in higher operating income. The corporation operating cash flow is actually not affected until Galaxy actually collects the receivables.
In this case:
- The effect on Operating income would be High
- The effect on Operating cash flows is No effect
Ms. McClure is thinking about getting her master's degree in education. She estimates that she will spend about $12,000 a year for three years to get her degree. Her plans are to take evening classes so she can keep her current teaching job. When she finishes her degree, she will get a $5,000 a year raise.
Required:
How long will it take her to recover her investment?
Answer:
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Explanation:
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Dorman Company reported the following data: Net income $225,000 Depreciation expense 25,000 Gain on disposal of equipment 20,500 Decrease in accounts receivable 14,000 Decrease in account payable 3,600 Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Answer:
$239,900
Explanation:
Cash Flows from Operating Activities section
Particulars Amount
Net income $225,000
Add Depreciation expenses $25,000
Less Gain on disposal of equipment $20,500
Add Decrease in accounts receivables $14,000
Less Decrease in accounts payable $3,600
Net cash flow from operating activities $239,900
Tasty Time Cafeteria operates cafeteria food services in public buildings in the Midwest. Tasty Time is contemplating a major change in its cost structure. Currently, all of their cafeteria lines are staffed with hourly wage employees who hand serve the food to customers. Benson Riggs, Tasty Time’s owner, is considering replacing the employees with an automated self-service system. However, before making the change, Benson would like to know the consequences of the change, since the volume of business varies significantly from location to location. Shown below are the CVP income statements for each alternative.
Personal Service System Automated Self-Service System
Sales $2,280,000 $2,280,000
Variable costs 1,710,000 1,140,000
Contribution margin $570,000 $1,140,000
Fixed costs 114,000 684,000
Net Income $456,000 $456,000
Required:
a. Determine the degree of operating leverage for each alternative.
b. Which alternative would produce the higher net income if sales increased by $228,000?
Answer:
a. Personal Service System = 1.25 and Automated Self-Service System = 2.50
b. Automated Self-Service System will produce the higher net income.
Explanation:
1. Degree of Operating Leverage (DOL)
Degree of Operating Leverage (DOL) shows the times Earnings Before Interest and Tax (EBIT) will change as a result of a change in sales contribution.
Degree of Operating Leverage (DOL) = Contribution ÷ Earnings Before Interest and Tax
Therefore,
Degree of Operating Leverage (DOL) for each service will be as follows :
Personal Service System = $570,000 ÷ $456,000
= 1.25
Automated Self-Service System = $1,140,000 ÷ $456,000
= 2.50
2. Effect on Net Income
If Sales increase by $228,000, that is a 10 % increase.
Which will have the following effect on Net Incomes of the proposed services :
Personal Service System = 10 % × 1.25 = 12.5 %
Automated Self-Service System = 10 % × 2.50 = 25 %
Conclusion
Automated Self-Service System will produce the higher net income.
Company A considers buying company B by means of a tender offer. Company B will accept any offer of A which reflects a fair value (namely, any offer which is not below the expected value of the project to B, given B's information). Company B is currently undertaking a major project. If the project is a complete failure the fair value of each share of B will be $60, and if it's a complete success the fair value of a share will be $120. The outcome of the project can vary from a complete failure to a complete success, and all outcomes are equally likely. That is, the fair value of a share of B can be any number between 60 and 120 equally likely. The management of A is significantly more skillful than that of B. Under the management of A the share price of B will be $20 higher than under the current management of B. Assume that the offer of A is made before the outcome of the project is known, but B will decide to accept or reject after the outcome is announced. What should A offer B in terms of a price per share
Answer:
the price per share in the case when A offers B is $200
Explanation:
The computation of the price per share is as follows:
The fair value is
= ($60 + $120) × 50%
= $90
The 50% represent the percentage of equally
Now the price per share is
= $90 + $90 + $20
= $90 + $110
= $200
Hence, the price per share in the case when A offers B is $200
The same is to be considered
he Tattle Teller has a printing press sitting idly in its back room. The press has no market value to another printer because the machine utilizes old technology. The firm could get $250 for the press as scrap metal. The press is six years old and originally cost $148,000. The current book value is $2,570. The president of the firm is considering a new project and feels he can use this press for that project. What value, if any, should be assigned to the press as an initial cost of the new project
Answer: $250
Explanation:
The value that should be assigned to the press as an initial cost of the new project will simply be the relevant cost which has to.do with the opportunity cost that's what is forgone for something else to happen.
In this scenario, the value that should be assigned to the press as an initial cost of the new project will be $250 which is the value that the firm could get for the press as scrap metal.
Bothell Construction, LLC, Ballard Remodel, Inc., and Tim's House Painting Company agreed that on three upcoming projects, Ballard Remodel would bid lowest on one, Bothell Construction would submit the lowest bid on the second project, and Tim's House Painting would submit the lowest bid on the third project. All three discussed this and agreed that this would be the best way that each would be assured of work for the upcoming season. This behavior:
Answer:
violates ethical, but not legal, standards.
Explanation:
Sherman act was created to prohibit restrains on trade of any collusion by different parties to form a monopoly or control price.
The act does not however prohibit all restraints of trade, bit rather those that are very unreasonable and harmful to competition.
In the given scenario the three companies only agreed to bid lowest for the 3 project under consideration.
Their action does not give them unfair advantage over other firms and may even lead to a loss on their part.
They do not have a strategy that will guarantee an edge over other firms.
So this is an ethical violation but not a legal one.
If a preferred stock from Pfizer Inc. (PFE) pays $4.00 in annual dividends, and the required return on the preferred stock is 8.00 percent, what's the value of the stock?
a. $50.00
b. $0.32
c. $32.00
d. $0.50
Answer:
Option a ($50.00) seems to be the right approach.
Explanation:
The given values are:
Annual dividend is,
= $4.00
Required return is,
= 8.00% i.e., 0.08
By using the formula, we get
⇒ [tex]Value \ of \ the \ stock=\frac{Annula \ Dividend}{Required \ return}[/tex]
On putting the above given values, we get
⇒ [tex]=\frac{4.00}{0.08 }[/tex]
⇒ [tex]=50[/tex] ($)
_____ comprises a range of practices concerned with increasing awareness, fostering learning, speeding collaboration and innovation, and exchanging insights of individuals, teams, or entire organizations.
a. Knowledge management
b. Sales management
c. Resource management
d. Disaster management
Answer:
A. Knowledge management.
Explanation:
This is said to be an organisational approach that explains, retain and structure the dispatch of knowledge amongst employees within an organisational setting. This approach is seen to posses different goals but primarily it is seen to maintain a reasonable amount of knowledge within the said organisation and also improvement in efficiency of the said workers ranging from the top management to the least in the core organisational settings. It is mostly seen to consist of varieties of initiatives, strategies and value creation through this process when been carried out judiciously.
Consider the exchange rate between Lebanon and Canada. Typically, exchange rates vary over time, sometimes quite dramatically. The scenarios present various changes that may affect the exchange rate. Identify whether each scenario will tend to cause an appreciation, depreciation, or have no effect on the exchange rate of Lebanese pounds relative to Canadian dollars. The magazine The Economist publishes an article indicating that analysts expect the value of Canadian dollars to rise relative to Lebanese pounds. The central bank in Lebanon announces that it is going to raise interest rates on government bonds. Based on a World Bank report, the inflation rate in Lebanon is going to be 5% next year, whereas the inflation rate in Canada is going to be 9.5% . The price of a specific basket of goods in Lebanon is roughly 1.3 times higher than the price of an identical basket of goods in Canada even after adjusting for the exchange rate.
Answer and Explanation:
1. The magazine The Economist publishes an article indicating that analysts expect the value of Canadian dollars to rise relative to Lebanese pounds: if the expectation from analysts is that the value of Canadian dollars will rise relative to Lebanese pounds then the demand for Canadiam dollars will increase therefore increasing the value/appreciate relative to Lebanese pounds.
2. The central bank in Lebanon announces that it is going to raise interest rates on government bonds: This will bring about appreciation in Lebanese pounds relative to Canadian dollars since increase in interest rate in bonds increases investment in government bonds in Lebanese pounds.
3. Based on a World Bank report, the inflation rate in Lebanon is going to be 5% next year, whereas the inflation rate in Canada is going to be 9.5%: A high inflation rate is a negative for the economy. Since inflation rate increases for both economies, there is likely to be a counter effect hence no effect on exchange rates.
4. The price of a specific basket of goods in Lebanon is roughly 1.3 times higher than the price of an identical basket of goods in Canada even after adjusting for the exchange rate: if this basket of goods is used in calculation of consumer price index(CPI) which is representative of the rate of inflation in the economy, then Lebanese pounds will depreciate relative to Canadian dollars since inflation rate has increased relative to the Canadian economy.
Q1. Big Money Monster is a business school. The school bases its budgets on two measures of activity: number of students and number of courses. The school uses the following data in its budgeting: Fixed cost per month Variable cost per student Variable cost per course Faculty wages $4,000 $0 $20 Course supplies $1,000 $10 $50 Administrative expenses $2,000 $20 $30 In July, the school budgeted for 300 students and 15 courses. Actual results for the month appear below: Number of Students 280 Number of Courses 18 Faculty wages $4,200 Course supplies $4,800 Administrative expenses $8,300 What is the spending variance for course supplies (choose the closest answer)
Answer:
Big Money Monster
The spending variance for course supplies is:
$50 Unfavorable.
Explanation:
a) Data and Calculations:
Fixed cost Variable cost Variable cost Total
per month per student per course
Faculty wages $4,000 $0 $20
Course supplies $1,000 $10 $50
Administrative expenses $2,000 $20 $30
Budgeted number of students = 300
Budgeted number of courses = 15
Actual number of students = 280
Actual number of courses = 18
Actual Faculty wages = $4,200
Actual Course supplies = $4,800
Budgeted Costs:
Fixed cost Variable cost Variable cost Total
per month per student per course
Faculty wages $4,000 $0 $20 $4,300
Course supplies $1,000 $10 $50 4,750
Administrative expenses $2,000 $20 $30 8,450
Budgeted costs:
Faculty wages = $4,000 + $0 + $20 * 15 = $4,300
Course supplies = $1,000 + $10 * 300 + $50 * 15 = $4,750
Administrative expenses = $2,000 + $20 * 300 + $30 * 15 = $8,450
Budgeted Cost of Course Supplies = $4,750
Actual Cost of Course Supplies = 4,800
Spending variance for Course Supplies = 50 Unfavorable
Question 4 of 10
Charging a lower price per unit for purchases of more units is called a
A. seasonal discount
B. quantity discount
C. sale price
D. stocking allowance
Bob is angry at his company XYZ Corp. since his annual bonus was too small. Bob who has authority to sign checks on behalf of XYZ decides to get even by creating an employee, Steven Even. Bob writes a check to Steven on XYZ's checking account, signs it and then he indorses it with Steven's name and deposits it an account he has opened in Steven Even's name and the check clears. XYZ finds out and wants to hold the bank liable for paying the check since there was a forged indorsement. Which of the following is true?
1. The bank needs to pay because of the imposter rule.
2. The bank only needs to pay if the check was for more than $500.
3. The bank needs to pay because when there is a forged indorsement, the first person
to take the instrument with the forged indorsement is liable.
4. The bank does not need to pay because of the fictitious payee rule.
Answer: The bank does not need to pay because of the fictitious payee rule
Explanation:
The fictitious payee rule states that in a scenario whereby a person or a bank collects a negotiable instrument like a check and then pays the check to the fictitious person, the drawer of the check is responsible and the loss doesn't fall on the third party who accepted the instrument or in this case, the bank that cashed the check.
Therefore, based on the explanation above, the option that is true is that "the bank does not need to pay because of the fictitious payee rule".
A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines were purchased at the same time. The estimated probability of low demand is .30, and the estimated probability of high demand is .70. The net present value associated with the purchase of two machines initially is $75,000 if demand is low and $130,000 if demand is high. The net present value for one machine and low demand is $90,000. If demand is high, there are three options. One option is to do nothing, which would have a net present value of $90,000. A second option is to subcontract; that would have a net present value of $110,000. The third option is to purchase a second machine. This option would have a net present value of $100,000. How many machines should the manager purchase initially
Answer:
BUY TWO MACHINES
Explanation:
Calculation for how many machines should the manager purchase initially
BUY ONE MACHINE =(High demand 0.7*100,000)+(Low demand 0.3*90,000)
BUY ONE MACHINE =70,000+27,000
BUY ONE MACHINE=97,000
Note :High demand 100,000 is the Average of Do nothing ,Tomorrow Sub-contract and Buy second machine
High demand=90,000+110,000+100,000
High demand=300,000/3
High demand=100,000
BUY TWO MACHINES
High demand =(0.7 x 130000)
High demand= 91,000
Low demand= (0.3 x 75000)
Low demand=22,500
Hence,
BUY TWO MACHINES= (91,000 + 22,500)
BUY TWO MACHINES=113,500
Based on the above calculation we can see that
the expected payoff from BUY ONE MACHINE is 97,000 while that of BUY TWO MACHINES is 113,500 which means that BUY TWO MACHINES is higher hence, the manager should BUY TWO MACHINES today.
The average wage of workers increases in a purely competitive industry. This change will result in (I) increase in marginal cost for the firms in the industry (II) increase in average variable cost for firms in the industry (III) increase in average fixed cost for firms in the industry (IV) increase in the industry supply curve
Answer:
The correct option is (I) increase in marginal cost for the firms in the industry
Explanation:
According to the given scenario, when there is a rise in increase in the workers wages in a purely competitive industry so the production cost would also rise that results in an increment in the marginal cost also the maximize profit arises when the marginal cost is equivalent to the marginal revenue
Therefore as per the given scenario, the correct option is (I)