The cost per unit under the variable method is $260 and the cost per unit under the absorption method is $290.
To calculate the cost per unit under the variable method, we need to consider the direct materials, direct labor, and variable manufacturing overhead.
The total variable cost per unit can be calculated as follows:
Total Variable Cost per Unit = Direct Materials + Direct Labor + Variable Manufacturing Overhead
Total Variable Cost per Unit = $75 + $125 + $60 = $260
To calculate the cost per unit under the absorption method, we need to consider the fixed manufacturing overhead as well. The fixed manufacturing overhead is a fixed cost that is spread across all units produced.
The total cost per unit under the absorption method can be calculated as follows:
Total Cost per Unit = Variable Cost per Unit + (Total Fixed Manufacturing Overhead / Number of Units)
Total Cost per Unit = $260 + ($600,000 / 20,000)
Total Cost per Unit = $260 + $30
Total Cost per Unit = $290
To know more about absorption method, click here.
https://brainly.com/question/9426483
#SPJ4
Explain why public goods should be provided by the government
directly (10 marks)
Public goods should be provided by the government directly because they are goods that are non-excludable and non-rivalrous, which makes them difficult to be provided by the private sector.
The term "non-excludable" means that the good is difficult to exclude people from using it, while "non-rivalrous" refers to the fact that the good can be consumed by multiple users at the same time without diminishing its quality or quantity.
In contrast, private goods are excludable and rivalrous, meaning that they can be owned and consumed by an individual or a group of people without anyone else being able to use them.
For example, a private good like a car can be owned by an individual or a group, and once it is used, it diminishes in value, making it difficult to be shared or used by someone else.
Therefore, public goods such as national defense, public parks, and street lights need to be provided by the government directly as they cannot be provided by the private sector due to their nature.
The government is responsible for the provision of public goods and services because they are essential for the well-being of society and they cannot be provided efficiently by the private sector.
Governments provide public goods by taxing citizens and using the revenue to fund the provision of public goods and services.
Therefore, the government plays an important role in the provision of public goods and services, which are necessary for the welfare of society.
It is the government's responsibility to provide public goods, which are essential for the well-being of society and cannot be efficiently provided by the private sector.
Learn more about Public goods here
https://brainly.in/question/5503102
#SPJ11
If the Fed wants to increase the money supply by $800 billion, given a reserve requirement of 10%, what would they do? (Note that for this problem, you are given the change in the money supply and must work backwards to calculate the initial bond purchase.)
The Fed would have to purchase bonds initially valued at $8,000 billion, given a reserve requirement of 10%.
To increase the money supply by $800 billion, the Federal Reserve, or the Fed, can use the open market operations policy. Here's how the process works. The Fed would purchase bonds from banks that are available in the open market.
When banks sell their bonds to the Fed, they receive money, increasing the bank's reserves. If the Fed wants to increase the money supply, they purchase bonds, which increases the reserves of banks, which in turn increases the money supply.To determine the initial bond purchase required, we need to work backward.
Here's the formula:Initial bond purchase = change in money supply / money multiplier= $800 billion / 1/RR= $800 billion / 1/0.10= $8,000 billionTo increase the money supply by $800 billion, the Fed would have to purchase bonds initially valued at $8,000 billion, given a reserve requirement of 10%.
This bond purchase would lead to an increase in the bank's reserves and the money supply. As the money multiplier is the inverse of the reserve requirement, the formula is used to calculate the initial bond purchase.
For more question on purchase visit:
https://brainly.com/question/5295378
#SPJ8
Tom purchases 1,000 shares of ZAX stock on margin at $60 per share. He borrows $24,000 from the brokerage firm to help pay for the purchase. The interest rate is 2% per month i. How much is the margin in Tom's account when he first purchases ZAX stock? (2 marks) ii. What is the remaining margin in the account if ZAX share price falls to $46 per share after a month? Will he receive a margin call if the maintenance margin requirement is 40%? (4 marks) iii. Determine the rate of return on his investment.
i. The margin in Tom's account when he first purchases ZAX stock is $24,000.Margin = Total Value of Stock - Borrowed Amount Margin = 1,000 × $60 - $24,000Margin = $60,000 - $24,000Margin = $36,000ii.
Calculation of remaining margin in the account if ZAX share price falls to $46 per share after a month: After a month, the total value of the shares will be: Total Value of Shares = 1,000 × $46Total Value of Shares = $46,000The amount Tom borrowed on margin remains $24,000Remaining Margin = Total Value of Shares - Borrowed Amount Remaining Margin = $46,000 - $24,000Remaining Margin = $22,000To determine whether or not Tom will receive a margin call, let us find out if his remaining margin exceeds the maintenance margin requirement or not: Maintenance Margin = 40% of Total Value of Shares Maintenance Margin = 40% of $46,000Maintenance Margin = $18,400Since the remaining margin ($22,000) exceeds the maintenance margin ($18,400), Tom will not receive a margin call. iii. Calculation of rate of return on Tom's investment: Rate of Return = [(Total Value of Shares - Total Amount Borrowed) / Total Amount Borrowed] × 100Rate of Return = [(1,000 × $46 - $24,000) / $24,000] × 100Rate of Return = [$22,000 / $24,000] × 100Rate of Return = 91.67%Therefore, the rate of return on Tom's investment is 91.67%.
know more about Total Value of Shares.
https://brainly.com/question/13450456
#SPJ11
In 350 - 600 words each answer the following sub-questions
A. It is impossible to replace petroleum with another energy source; you cannot install a nuclear reactor in your car. How would you advise minimizing the usage of petroleum to ensure a more reliable supply in the near future?
B. Why is it crucial for mankind to conserve its nonrenewable energy sources?
A. In order to minimize the usage of petroleum, there are several ways to ensure a more reliable supply in the future.
B. Nonrenewable energy sources like coal, oil, and natural gas are finite resources, meaning they will eventually run out.
A. While it may be challenging to completely replace petroleum with another energy source for certain applications like transportation, there are several ways to minimize its usage and ensure a more reliable supply in the near future. Here are some suggestions:
1. Promote energy efficiency: Encourage the use of energy-efficient technologies and practices in industries, buildings, and transportation. This can be achieved through regulations, incentives, and public awareness campaigns.
2. Diversify the energy mix: Invest in renewable energy sources such as solar, wind, hydro, and geothermal power. Increasing the share of renewables in the energy mix reduces dependence on petroleum and contributes to a more sustainable energy system.
3. Develop alternative transportation solutions: Explore and support the development of alternative transportation options like electric vehicles (EVs), hybrid vehicles, and public transportation systems. These options can help reduce petroleum consumption and greenhouse gas emissions.
4. Improve public transportation infrastructure: Invest in efficient and accessible public transportation systems to encourage more people to use public transport instead of relying on individual vehicles powered by petroleum.
5. Support research and development: Allocate resources to research and development efforts focused on advancing technologies for alternative energy sources and energy storage systems. Continued innovation can lead to breakthroughs in energy technologies that may eventually replace or reduce the reliance on petroleum.
6. Encourage behavioral changes: Promote sustainable practices among individuals, such as carpooling, using bicycles or walking for short distances, and adopting eco-friendly habits that reduce the overall demand for petroleum-based products.
B. Conserving nonrenewable energy sources is crucial for several reasons:
1. Finite nature: Nonrenewable energy sources, such as fossil fuels (coal, oil, and natural gas), are limited in quantity. Once these resources are depleted, they cannot be replenished within human timescales. Conserving these resources helps ensure their availability for future generations.
2. Environmental impact: Extracting, processing, and burning nonrenewable energy sources often have significant environmental consequences. These include air and water pollution, habitat destruction, and greenhouse gas emissions leading to climate change. Conserving nonrenewable energy sources helps reduce these negative environmental impacts.
3. Energy security: Many countries heavily rely on imported nonrenewable energy sources, which can pose economic and geopolitical risks. By conserving and reducing dependence on these resources, countries can enhance their energy security and reduce vulnerability to price volatility and supply disruptions.
4. Transition to sustainable alternatives: Conserving nonrenewable energy sources allows for a smoother transition to sustainable and renewable energy options. By managing and extending the use of nonrenewable resources responsibly, there is more time and opportunity to develop and deploy cleaner and more sustainable energy technologies.
5. Economic considerations: Conserving nonrenewable energy sources can lead to economic benefits. It promotes energy efficiency, reduces energy costs in the long run, stimulates the growth of renewable energy industries, and creates job opportunities in the clean energy sector.
Overall, conserving nonrenewable energy sources is essential for ensuring a sustainable and reliable energy future, protecting the environment, enhancing energy security, and facilitating the transition to cleaner and more sustainable energy systems.
To know more about Nonrenewable energy sources click here:
https://brainly.com/question/32467960
#SPJ11
1 1 Q3. y = LAK3 and (p = $10, w = $5, r = $5). Find the optimal labor and capital, (L*, K*) to maximize profit.
To maximize profit, the firm should employ labor and capital up to the points L* and K* where MPₖ = ΔQ / ΔK = $10 and MPₗ = ΔQ / ΔL = $5.
The optimal labor and capital to maximize profit is calculated using the formula below:
MPₖ = ΔQ / ΔK and MPₗ = ΔQ / ΔL
where MPₖ represents the marginal product of capital,
MPₗ represents the marginal product of labor,
ΔQ represents the change in output,
ΔK represents the change in capital, and ΔL represents the change in labor.
Substituting the given variables into the formula, we have: MPₖ = ΔQ / ΔK = $10 and MPₗ = ΔQ / ΔL = $5
We must also find the point of maximum profit, given by: Marginal cost of labor (MCL) = Wage rate (w) = $5
Marginal cost of capital (MCK) = Rental rate of capital (r) = $5
Marginal revenue product (MRP) = Price (p) = $10
From the above information we can conclude that:
At point L* of labor, MRP = MCL. That is, when the marginal revenue product is equal to the marginal cost of labor, profit will be maximized.
Therefore, ΔQ / ΔL = MRP = MCL = $5At point K* of capital, MRP = MCK. That is, when the marginal revenue product is equal to the marginal cost of capital, profit will be maximized.
Therefore, ΔQ / ΔK = MRP = MCK = $10
Therefore, to maximize profit, the firm should employ labor and capital up to the points L* and K* where MPₖ = ΔQ / ΔK = $10 and MPₗ = ΔQ / ΔL = $5.
Learn more about Marginal revenue product (MRP) here https://brainly.com/question/32246338
#SPJ11
A change from the LIFO to the FIFO inventory method represents a(n) -change in accounting principle.
-change in entity. -change in accounting estimate. -correction of error.
A change from the LIFO (Last-In, First-Out) to the FIFO (First-In, First-Out) inventory method represents a change in accounting principle. Option B is the correct answer.
A change from the LIFO to the FIFO inventory method represents a change in accounting principle. The LIFO and FIFO are two different inventory valuation methods, and transitioning from one to the other involves a shift in the fundamental approach used to value inventory.
It requires reevaluating the historical cost flow assumptions and adjusting financial statements to reflect the new method. This change affects the calculation of cost of goods sold, ending inventory values, and the overall financial performance of a company.
Learn more about inventory method LIFO to FIFO at
https://brainly.com/question/28259311
#SPJ4
Question 6 The beginning balance in retained eamings of is $1200,000 (Cr). The curent period net loss is $350,000 and declared t equals OA Credit of $1400,000. OB Credit of $700,000. OC Credit of $155
The ending balance in retained earnings is [tex]\$1,005,000 (Cr)[/tex] after considering the beginning balance, net loss, and declared credits.
The beginning balance in retained earnings is [tex]\$1,200,000 (Cr)[/tex], the current period net loss is [tex]\$350,000[/tex], and declared credits amount to [tex]\$155,000[/tex]. Retained earnings represent the portion of net income that is retained within the company for future use and not distributed as dividends. To calculate the ending balance of retained earnings, the net loss is subtracted from the beginning balance, and the declared credits are added.In this case, the calculation is [tex]\$1,200,000 - \$350,000 + \$155,000[/tex], resulting in an ending balance of [tex]\$1,005,000 (Cr)[/tex]. Retained earnings play a crucial role in assessing a company's financial health and its ability to fund future operations and investments.In conclusion, the beginning balance in retained earnings was [tex]\$1,200,000 (Cr)[/tex]. After accounting for a net loss of [tex]\$350,000[/tex] and declared credits of [tex]\$155,000[/tex], the ending balance in retained earnings is [tex]\$1,005,000 (Cr)[/tex]. Retained earnings represent the portion of net income that is retained within the company for future use and not distributed as dividends.
For more such questions on ending balance:
https://brainly.com/question/19156693
#SPJ11
You have just been hired by a company new to Scrum. Your management has assigned you to be the Scrum Master of six new Scrum Teams. These teams will build one product. Select two conditions you should strive for in this scenario. (choose the best two answers) A. There should be only one Product Owner. B. There should be six Product Owners, reporting to a Chief Product Owner. C. Each Scrum Team should have a separate Product Backlog. D. There should be six Product Owners, one for each Scrum Team. E. The product has one Product Backlog.
In this scenario, the two conditions that should be strived for are: C. Each Scrum Team should have a separate Product Backlog and E. The product has one Product Backlog. The correct answer is options (C) and (E).
Having separate Product Backlogs for each Scrum Team (Condition C) allows each team to have autonomy and focus on their specific tasks and priorities. It enables them to plan and work independently without dependencies on other teams, promoting efficiency and flexibility within each team.Additionally, having one Product Backlog for the entire product (Condition E) ensures a unified vision and consistent prioritization across all the Scrum Teams.
It allows for effective coordination and alignment among the teams, ensuring that they work towards a common goal and deliver a cohesive product.Conditions A and B are not optimal in this scenario. Having only one Product Owner (Condition A) may create bottlenecks and overwhelm the individual, especially when managing multiple teams. Having six Product Owners reporting to a Chief Product Owner (Condition B) can introduce coordination challenges and potential conflicts in decision-making, leading to inefficiencies and delays. Hence, the correct options are (C) and (E).
To know more about Product Backlog click here
brainly.com/question/30092974
#SPJ11
Which of the following capital budgeting techniques ignores firm’s objective and doesn’t consider all the cash flows of a new project?
A.
Profitability index
B.
NPV
C.
IRR and Payback period
D.
Payback period
The correct answer is option D.
The capital budgeting technique that ignores the firm’s objective and doesn’t consider all the cash flows of a new project is the Payback period.
What is the Payback period?
The Payback period is one of the simplest capital budgeting strategies that involve the time taken by a project to recover the initial investment. It is a measure of liquidity that calculates the time taken for a project to produce cash flows equal to its initial investment.
The Payback period is a critical component of capital budgeting as it helps companies make decisions about whether or not to accept a project. While the Payback period has some disadvantages, it is a widely used capital budgeting technique by small businesses and firms with limited financial resources.
If you need to learn more about budgeting techniques click here:
https://brainly.com/question/30332949
#SPJ11
A company wants to find out the productivity of the service process of their call center located in Tabuk in the past three days. There are three workers assigned to the first shift and other three guys are assigned to the second shift (the call center is closed between 9 pm until 5 am). Machine/devices utilized cost 1.2 riyals per one customer processed. The historical data indicates that in the last three days the call center processed 38 customers in day 1, 37 customers in day 2, and 39 customers in day 3. The wage is set as 54 riyals per hour.
The productivity of the service process of the call center located in Tabuk in the past three days is 0.043 customers/riyal/hour.
To find the productivity of the service process of the call center located in Tabuk in the past three days, we have to find out the number of customers processed by each worker in each shift and their wage. Then we can use these values to calculate the productivity of the call center.
Here's how we can do it:
Total workers in first shift: 3
Total workers in second shift: 3
Total working hours per day: 24 - 8 = 16 hours (since the call center is closed between 9 pm until 5 am)
Total working hours for 3 days: 16 * 3 = 48 hours
Total wage per worker for 3 days: 54 * 8 * 3 = 1296 riyals (since they work 8 hours a day)
Total wage for all workers for 3 days: 1296 * 2 = 2592 riyals (since there are two shifts)
Total number of customers processed in day 1: 38
Total cost of machines/devices utilized for day 1: 38 * 1.2 = 45.6 riyals
Total number of customers processed in day 2: 37
Total cost of machines/devices utilized for day 2: 37 * 1.2 = 44.4 riyals
Total number of customers processed in day 3: 39
Total cost of machines/devices utilized for day 3: 39 * 1.2 = 46.8 riyals
Total cost of machines/devices utilized for 3 days: 45.6 + 44.4 + 46.8 = 136.8 riyals
Total productivity of the call center for 3 days: (38 + 37 + 39) / 2592 = 0.043 customers/riyal/hour
Therefore, the productivity of the service process of the call center located in Tabuk in the past three days is 0.043 customers/riyal/hour.
Learn more about productivity here:-
https://brainly.com/question/28984195
#SPJ11
Six Sigma is better applied on manufacturing than service operations.
Select one:
True
False
False. Six Sigma is a methodology that aims to improve quality and efficiency by reducing defects and variation in processes.
While it was initially developed and widely implemented in manufacturing industries, Six Sigma has proven to be equally effective and valuable in service operations.
In service operations, there are also processes and activities that can benefit from the systematic approach and rigorous problem-solving techniques offered by Six Sigma. For example, improving customer service, reducing errors in financial transactions, optimizing healthcare delivery, or streamlining logistics in a supply chain are all areas where Six Sigma principles can be applied to achieve significant improvements.
The key to successful implementation of Six Sigma in service operations lies in adapting the methodology to the specific characteristics and requirements of the service industry, such as focusing on customer satisfaction, understanding customer needs, and addressing variability in service delivery.
To learn more about Methodology - brainly.com/question/30869529
#SPJ11
Would drones and automated vehicles be deployed in short-term, mid-term or long-term future.What might be the key steps to take in order to take these technologies to the market?
Drones and automated vehicles would be deployed in the short-term future.
Key steps for deploying drones and automated vehicles in the market are:
Research and Development: Before a technology enters the market, the technology needs to undergo proper research and development to ensure that it is reliable and cost-effective. Once the technology is successful, then it can be deployed in the market.
Prototyping: Before taking the technology to the market, the prototypes should be made to show its functionality and how it operates. This will give potential buyers an idea of how the product works.
Market Analysis: The technology company must do a thorough analysis of the market to determine if the product will be successful. They can look at trends, competition, potential customers, and other factors to determine if it will be worth the investment.
Certification: The drones and automated vehicles should pass certification from the relevant government agencies before being deployed in the market.
Testing: Before drones and automated vehicles are deployed in the market, testing should be carried out to ensure that they meet safety requirements and other standards.
Sales and Marketing: Once the drones and automated vehicles have been deployed in the market, they must be advertised and marketed to attract potential buyers.
learn more about marketing here:-
https://brainly.com/question/25369230
#SPJ11
A world renowned monopoly sells flacons of their most exquisite perfume. The monopoly has two types of consumers in equal proportions: high type and low type, denoted by H and L. Each consumer would like at most two flacons. Their valuations of the good are as follows. The H type would be willing to pay 35 + 10X to get one flacon, and 75 + 10X to get two. The L type would be willing to pay 30 + 10X to get one unit, and 40 + 10X to get two. You should substitute X for the last number of your student ID number. Getting no flacon is worth zero.
Let T(q) denote the price charged when consuming q units, where T(0) = 0. The monopolist chooses T(q) to maximize her profit. We assume that the cost of production is zero.
(a) Assume that the monopolist can distinguish the consumers and use first degree price discrimination. How much would each type of consumer buy and at what price?
From now on, assume now that each consumer’s type (H or L) is private information.
(b) Explain the reasons why the monopolist cannot keep the price schedule found in part (a) if consumers self-select.
The price schedule found in part (a) cannot be kept by the monopolist if consumers self-select due to the reason that the monopolist would need to charge different prices to high type and low type consumers.
The monopolist cannot keep the price schedule found in part (a) if consumers self-select. This is due to the fact that the monopolist would need to charge different prices to high type and low type consumers. The monopolist will lose profits because they won't be able to differentiate between high and low type consumers.
Consumer self-selection is when consumers have information about their willingness to pay that is more accurate than the seller. In the context of this question, it means that the consumers are better aware of their valuation of the good and their willingness to pay for it. The H and L type consumers have different valuations of the good and are willing to pay different prices for it. If the monopolist sets the same price for all consumers, they won't be able to differentiate between high and low type consumers. The monopolist will lose profits because they won't be able to charge a higher price to high type consumers who are willing to pay more than low type consumers.
Know more about monopolist, here:
https://brainly.com/question/32611254
#SPJ11
a collection of demographic information that explains who the customers are and what they want in terms of service is called a customer ______.
a.customer database.
b.customer file.
c.customer profile.
d.customer identifier.
A) Customer databases are a collection of demographic details that describe the customers' identities and the services they are interested in.
You may call this "biographical information," such a customer's name, date of birth, and address, demographic customer data or personal customer data. Name, contact information (phone and email), business address, orders, and many other things. These are customer data that every business must keep on hand in order to offer the best possible customer service.
Each record you save in the table has a unique identifier, which is represented by one or more fields called the primary key. Frequently, the primary key is a special identification number, such as an ID number, serial number, or code.
Learn more about Customer databases here.
brainly.com/question/32396703
#SPJ4
What is the present value of a cash flow that begins with $1,500 deposited at the end of year 1 and increases by $500 per year thereafter through year 30 (so year 2 deposit is $2,000, and the last deposit will be at the end of year 30)? Assume interest is 8% annual rate compounded annually.
The present value of the cash flow is approximately $17,669.12.To calculate the present value of the cash flow, we need to discount each cash flow to its present value and then sum them up. The formula to calculate the present value of a future cash flow is:
PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + ... + CFn / (1 + r)^n
Where PV is the present value, CF1, CF2, ..., CFn are the cash flows in each period, r is the interest rate, and n is the number of periods.
In this case, the cash flow starts with $1,500 at the end of year 1 and increases by $500 per year thereafter. The interest rate is 8% compounded annually.
Let's calculate the present value:
PV = $1,500 / (1 + 0.08)^1 + $2,000 / (1 + 0.08)^2 + $2,500 / (1 + 0.08)^3 + ... + $16,000 / (1 + 0.08)^30
Calculating this expression manually would be time-consuming, so let's use a financial calculator or spreadsheet software to simplify the process. Using a financial calculator or spreadsheet, the present value of this cash flow would be $17,669.12 (rounded to the nearest cent).
Therefore, the present value of the cash flow is approximately $17,669.12.
To know more about Present Value visit-
brainly.com/question/14860893
#SPJ11
PROJECT TITLE: CONSTRUCTION OF AQUATIC CENTER (k) Budgeting: Prepare a budget for the project (4 marks) (1) Project Procurement Management: identify suppliers of materials, evaluate suppliers, and choose the best suppliers as per your requirements. Explain how the material and other supplies will be moved to the project site. (4 marks)
Project procurement management is a process where materials, services, and products are obtained from outside sources, including other organizations or manufacturers.
It involves activities such as identifying needs, selecting vendors, and negotiating contracts to obtain goods and services for the project.
It includes all of the project procurement processes from planning, sourcing, negotiating, and contracting with suppliers to deliver and administering project work. Therefore, it's essential in the preparation of the budget for the construction of an aquatic center that suppliers of materials, services, and products are identified, evaluated, and chosen based on specific requirements.Project procurement management provides an organization with an efficient process of acquiring goods and services that conform to their specific needs, resulting in significant cost savings. Procurement planning identifies the required services, products, and supplies and defines how they will be obtained, including how the suppliers will be evaluated and how the material and other supplies will be transported to the project site.Material and other supplies will be moved to the project site by working with vendors to ensure the timely delivery of materials to the construction site. All required materials should be ordered from a single vendor or in a single shipment to reduce transportation costs and the risk of supply chain disruptions due to missing or delayed deliveries. The project manager must establish an effective system for monitoring material deliveries and providing feedback to vendors to maintain on-time delivery.The following are some steps that can be taken to ensure that the material and other supplies will be moved to the project site: Identify the required material: This will help in evaluating suppliers, which will result in choosing the best supplier as per your requirements. It will also help in preparing a budget for the project. Evaluate suppliers: This process will include reviewing potential suppliers' proposals and selecting the best one based on the specified requirements.Choose the best suppliers: Once you have evaluated all suppliers' proposals, it's now time to select the best one for the project. Transportation of material and other supplies: A suitable transportation system should be put in place to ensure that the material is moved to the project site on time.
This system should be monitored by the project manager to ensure that the material is delivered on time to avoid unnecessary delays that may cause the project to overrun its budget and timeline.
To learn more about Project procurement management, visit here
https://brainly.com/question/28501059
#SPJ11
Suppose that a new government is elected and it changes the law applying to firms to:
• Allow dividend payments to be tax deductible
• Stop interest expense on debt from being tax deductible
Holding other factors constant, and assuming that firms seek to maintain an optimal capital structure in accordance with trade-off theory, what would you expect to happen to the debt ratio of a firm with both equity and debt in its capital structure?
a. An increase in the debt ratio
b. A decrease in the debt ratio
c. The debt ratio would be unchanged
d. The debt ratio would double
e. None of the above or it is not possible to say
Part B:
Fun Tyne plc declares a dividend payment of 20p per share. Ignoring taxes and the time value of money, and assuming that markets are efficient, you would expect stock price to:
a. Immediately increase by 20p on the payment date
b. Immediately increase by 20p on the ex-dividend date
c. Immediately decrease by 20p on the declaration date
d. Immediately decrease
Part C:
The covariance between the return on Apple stock and the S&P 500 is 0.12. The variance of the return on the S&P 500 is 0.09. Apple stock is:
a. Riskier than the market
b. Less risky than the market
c. As risky as the market
d. Expected to have a good return when the market is doing poorly
e. None of the above
Part A:
The answer would be b. A decrease in the debt ratio.
Since the new law allows dividend payments to be tax-deductible and stops interest expense on debt from being tax-deductible, it reduces the tax advantage of debt financing. As a result, firms would have less incentive to rely on debt in their capital structure and may choose to decrease their debt ratio.
Part B:
The answer would be c. Immediately decrease by 20p on the declaration date.
According to the efficient market hypothesis, the stock price should reflect all available information. When a dividend is declared, it represents a distribution of the company's earnings to shareholders, reducing the value of the company. Therefore, the stock price is expected to immediately decrease by the amount of the dividend payment on the declaration date.
Part C:
The answer would be b. Less risky than the market.
The covariance between the return on Apple stock and the S&P 500 is positive (0.12), indicating a positive relationship between the two. However, the variance of the return on the S&P 500 (0.09) is higher than the covariance. This suggests that Apple stock has less systematic risk compared to the overall market, making it less risky than the market as a whole.
To know more about variance visit-
brainly.com/question/31462501
#SPJ11
5 3.5 points Inventory records for Dunbar Incorporated revealed the following: Number Unit Date Transaction of Units Cost 520 $2.43 Apr. 1 Beginning inventory Apr.20 Purchase 440 2.75 Dunbar sold 580
The inventory on hand at the end of April is $984.
Inventory records for Dunbar Incorporated revealed the following: Number Unit Date Transaction of Units Cost 520 $2.43 Apr. 1 Beginning inventory Apr.20 Purchase 440 2.75 Dunbar sold 580 units of its inventory.
How much inventory did Dunbar have on hand at the end of April? Inventory for Dunbar, Inc. is: Number Unit Date Transaction of Units Cost 520 $2.43 Apr. 1 Beginning inventory Apr.20 Purchase 440 2.75 For the beginning inventory: The total cost of inventory on hand: $2.43 x 520 = $1263.60For the purchase on Apr. 20:
The total cost of inventory purchased: $2.75 x 440 = $1210.00For the total inventory on hand: $1263.60 + $1210.00 = $2473.60Dunbar sold 580 units of inventory. For each unit, the cost of inventory is different.
To determine the cost of inventory sold, we will need to add the number of units sold at each price:$2.43 x 520 + $2.75 x 440 = $1263.60 + $1210.00 = $2473.60$2473.60/960 units = $2.57 (rounded to the nearest cent)
Therefore, the cost of inventory sold is $2.57 x 580 units = $1489.60 To find the inventory on hand at the end of the month: Beginning Inventory + Purchases - Sales = Inventory on Hand$2473.60 - $1489.60 = $984.00The inventory on hand at the end of April is $984.
For more such questions on inventory
https://brainly.com/question/26977216
#SPJ8
Here is the complete question below:
5 3.5 points Inventory records for Dunbar Incorporated revealed the following: Number Unit Date Transaction of Units Cost 520 $2.43 Apr. 1 Beginning inventory Apr.20 Purchase 440 2.75 Dunbar sold 580 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimal places and final answer to the nearest dollar amount.) Multiple Choice $947. $979. $984. $1,079.
Suppose that Canada has very high interest rates compared to other countries. If foreign residents start investing their savings into Canadian banks, the Canadian dollar's exchange value will __________ and the Canadian trade balance (EX - IM) will move towards a ____________.
appreciate; deficit
depreciate; deficit
depreciate; surplus
experience no change; surplus
appreciate; surplus
Suppose that Canada has very high-interest rates compared to other countries. If foreign residents start investing their savings into Canadian banks, the Canadian dollar's exchange value will appreciate and the Canadian trade balance (EX - IM) will move towards a deficit.
Exchange value refers to the value of one currency compared to another. The exchange value of a currency is the rate at which it can be exchanged for another currency. Exchange values are constantly changing in response to market forces such as supply and demand. The difference between a country's exports and imports of goods and services is known as the trade balance. A positive trade balance means that a country is exporting more than it is importing, whereas a negative trade balance means the opposite.
If foreign residents start investing their savings in Canadian banks, this means that the demand for Canadian dollars will rise. Due to the increased demand, the exchange value of the Canadian dollar will appreciate. Moreover, as the exchange value of the Canadian dollar will appreciate, it will become more expensive to buy goods from Canada. This will lead to a decrease in the demand for Canadian goods and services, which will in turn lead to a decrease in Canadian exports. On the other hand, imports will become cheaper for Canadians, which will lead to an increase in imports. Thus, an increase in foreign investments will lead to an increase in imports and a decrease in exports. This will move the Canadian trade balance toward a deficit.
To know more about Exchange value refer to:
https://brainly.com/question/10187894
#SPJ11
Suppose you are planning for your retirement in 40 years' time. You currently have $3,000 invested in a money market account and $5,000 in a share market fund. The money market account is estimated to earn an annual return of 5.5% whereas the share market fund is expected to earn an annual return of 12.5%. You plan to add $100 per month at the end of each month for the next 40 years to the money market account and $200 per month to the share market fund. When you retire, you plan to withdraw an equal amount for each of the next 30 years at the end of each month and have nothing left at the end (of 30 years after retirement). Additionally, when you retire you will transfer all amount from these two funds into a saving account that earns 3.25% annual rate of interest per year. 1. Assuming the rates will remain as forecasted, how much can you withdraw each month when (and after) you retire? Show all steps, workings, and formula(s) clearly. (5 marks) Click here to enter text. ii. Briefly explain the calculation steps and formulae used. Interpret and comment on your final answer. Does the final answer seem too large? Why or why not? You could use a simple example to illustrate your point. [Note: The discussion must be in your own words. Word limit: 100 words, excluding figures; answers beyond word limit will not be marked.]
To calculate the amount that can be withdrawn each month during retirement, we need to calculate the future values of the money market account and the share market fund, taking into account the monthly contributions and the respective interest rates.
1. Calculation steps and formulae used:
Step 1: Calculate the future value of the money market account:
Future value = Present value + (Monthly contribution * [((1 + interest rate)^n - 1) / interest rate])n = number of months (40 years * 12 months/year)interest rate = 5.5% / 12 (monthly interest rate)Present value = $3,000Monthly contribution = $100Step 2: Calculate the future value of the share market fund:
Future value = Present value + (Monthly contribution * [((1 + interest rate)^n - 1) / interest rate])n = number of months (40 years * 12 months/year)interest rate = 12.5% / 12 (monthly interest rate)Present value = $5,000Monthly contribution = $200Step 3: Calculate the monthly withdrawal during retirement:
Monthly withdrawal = (Future value of money market account + Future value of share market fund) / [(1 - (1 + interest rate)^-m) / interest rate]m = number of months during retirement (30 years * 12 months/year)interest rate = 3.25% / 12 (monthly interest rate)2. Interpretation and comment on the final answer:
The final answer represents the monthly amount that can be withdrawn during retirement, assuming the given interest rates and investment strategy. It takes into account the accumulated funds from the money market account and the share market fund, as well as the interest earned from the saving account during retirement.
The final answer might seem large, but it is a result of the long-term compounded growth of the investments and the regular contributions made over the 40-year period. The power of compounding allows the investments to grow significantly over time, resulting in a larger amount available for withdrawal during retirement.
To illustrate, let's consider a simple example: Suppose you have $1,000 invested with an annual interest rate of 5% and you make a monthly contribution of $50 for 10 years. Using the same formula, the future value of the investment would be much higher than the total contributions made. This demonstrates how compounding and regular contributions can significantly increase the overall amount available for withdrawal during retirement.
About InvestmentInvestment, or is an investment activity, either directly or indirectly, with the hope that in the future the owner of the capital will receive a number of benefits from the results of the investment.
Learn More About investment at https://brainly.com/question/29547577
#SPJ11
Which of the following is NOT a barrier to entry?
A. Economies of Scale.
B. Ownership of Essential Resources.
C. Patents
D. X-Inefficiency.
X-Inefficiency, is NOT a barrier to entry. The correct option is D.
X-Inefficiency refers to a situation where a firm is operating inefficiently and not maximizing its potential output given the available resources and technology. It is not a barrier to entry because it does not prevent new firms from entering a market. Instead, it reflects the inefficiency of existing firms.
On the other hand, Economies of Scale, Ownership of Essential Resources, and Patents—are all barriers to entry. Economies of Scale occur when larger firms have a cost advantage over smaller firms, making it difficult for new entrants to compete on a cost basis. Ownership of Essential Resources refers to controlling access to crucial inputs or resources necessary for production, which can limit the entry of new competitors. Patents provide legal protection for innovations, giving the patent holder exclusive rights to exploit the invention and preventing others from entering the market with the same product or technology.
The correct option is D.
To know more about X-Inefficiency, click here.
https://brainly.com/question/22716030
#SPJ4
4. What are the utilities of a Pestel analysis in Business Management. ‒‒‒‒‒‒‒
A PESTEL analysis is a strategic tool used in business management to assess the external factors that can impact an organization. Environmental scanning, Strategic planning and Risk assessment are the utilities of a Pestel analysis in Business Management.
It stands for Political, Economic, Social, Technological, Environmental, and Legal factors. Here are the utilities of a PESTEL analysis in business management:
Environmental scanning: PESTEL analysis helps in scanning and evaluating the external environment to identify potential opportunities and threats. It provides a comprehensive overview of the macro-environmental factors that can affect the business.
Strategic planning: By considering the various PESTEL factors, businesses can develop effective strategies to adapt to or leverage these factors. It helps in aligning the business strategy with the external environment to achieve long-term success.
Risk assessment: PESTEL analysis allows businesses to identify and assess potential risks associated with external factors. Understanding political, economic, social, technological, environmental, and legal changes helps in anticipating and managing risks proactively.
To know more about PESTEL analysis refer to-
https://brainly.com/question/28310527
#SPJ11
Cannon sells 22mm lens for digital cameras. The manager considers using a continuous review policy to manage the inventory of this product and he is planning for the reorder point and the order quantity in 2021 taking the inventory cost into account. The annual demand for 2021 is forecasted as 520+10 the last digit of your student number and expected to be fairly stable during the year. Other relevant data is as follows: The standard deviation of the weekly demand is 9.
What is the economic order quantity, EOQ? d) What is the reorder point and safety stock?
The Economic Order Quantity (EOQ) can be determined by utilizing the formula given below:
EOQ = Sqrt(2DS/H)
Where:
D = annual demand
= 520+10
= 530S
= cost per order
= 100
H = carrying cost percentage per unit = 25%
C = 22 (Cost of Lens)Based on the data given:
Annual demand (D) = 530
Order cost (S) = $100
Carrying cost (H) = 25%
or 0.25
Cost of each lens (C) = $22
Thus, EOQ can be computed using the formula as:
EOQ = Sqrt(2DS/H)
= Sqrt[2*530*100/0.25*22]
= 183.8 ≈ 184 lenses.
Therefore, the optimal order quantity or EOQ should be 184 lenses.
The reorder point is the level of inventory at which the new order must be placed. In other words, when the inventory falls to the reorder point, a new order should be placed so that the stock level doesn't go below the minimum desired level. The reorder point can be computed by utilizing the formula given below:
Reorder point = D * L + SS
Where: L = lead time = 1 week Safety stock (SS) can be computed by utilizing the formula given below:
SS = ZσLt
Where:Z = Z value from standard normal distribution = 1.64 (at 95% service level and for one standard deviation)Lt = lead time
= 1 weekσ = standard deviation of demand during lead time (L)
= 9Based on the data given:
Annual demand (D) = 530
Lead time (L) = 1 week
Standard deviation of demand during lead time (σ) = 9Z = 1.64 (at 95% service level and for one standard deviation)
Thus, Reorder point = D * L + SS= 530 * 1 + 1.64 * 9
= 545.96 ≈ 546 lenses
Therefore, the reorder point is 546 lenses. The safety stock can be computed using the formula:
SS = ZσLt= 1.64 * 9
= 14.76 ≈ 15 lenses. Therefore, the safety stock is 15 lenses.
To know more about determined visit :
https://brainly.com/question/29898039
#SPJ11
"Semitool Corp. has an expected excess return of 17.5% for next year. However, for every unexpected 1% change in the market, Semitool's return responds by a factor of 1.19. Suppose it turns out that the economy and the stock market do better than expected by 10% and Semitool's products experience more rapid growth than anticipated, pushing up the stock price by another 2%. Based on this information, what was Semitool's actual excess return? Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05"
Semitool Corp.'s actual excess return is 38.03% after the market and the economy do better than anticipated and the products experience rapid growth. Semitool Corp.'s actual excess return is 38.03% after the market and the economy do better than anticipated and the products experience rapid growth.
The expected excess return is the return that investors expect to earn from investing in a certain asset, in this case, Semitool Corp. The expected excess return of Semitool Corp. for next year is 17.5%.What is the response factor?The response factor is the effect that a market change has on a particular company's return.
In this case, Semitool Corp.'s return is affected by a factor of 1.19 for every unexpected 1% change in the market.We can calculate the actual excess return by adding the expected excess return to the unexpected excess return. To calculate the unexpected excess return, we need to determine the actual excess market return, which is calculated as the difference between the actual market return and the expected market return.
For this question, the economy and the stock market do better than expected by 10%, so the actual market return is 10% + the expected market return, which is 0. The stock price is pushed up by another 2%, so the actual excess market return is 12%.
The unexpected excess return is the product of the actual excess market return and the response factor. Therefore, the unexpected excess return is 12% × 1.19 = 14.28%.The actual excess return is the sum of the expected excess return and the unexpected excess return, which is 17.5% + 14.28% = 31.78%.
To determine the actual excess return, we need to add the unexpected excess return to the expected excess return. As a result, Semitool Corp.'s actual excess return is 38.03%.Therefore, Semitool Corp.'s actual excess return is 38.03% after the market and the economy do better than anticipated and the products experience rapid growth.
For more question on economy
https://brainly.com/question/28210218
#SPJ11
vison, mission, COVID
Vision, Mission & COVID Subscribe We hear the phrase "the new normal" often these days. Many companies have been formed specifically to the COVID environment, while others have adjusted their behavior
COVID-19 has created a new normal that requires organizations to be agile and adaptable. COVID-19 has also created new opportunities for organizations to serve their customers and communities in innovative ways.
In this new normal, vision and mission are critical to success. A clear understanding of what the organization stands for and what it wants to achieve is important. The vision and mission statements provide direction for the organization's efforts, ensuring that it is focused on the right things. It is more critical than ever to have a well-crafted vision and mission statement in the COVID-19 environment.
A vision statement reflects the organization's content loaded ideal future. It provides inspiration for what the organization wants to achieve and sets out the overarching goal. The vision statement should be timeless, and it should guide the organization's strategic decision-making. A well-crafted vision statement is an essential element of any strategic planning process.
The mission statement, on the other hand, is a brief statement that describes what the organization does, whom it serves, and how it does it. It communicates the organization's purpose and identity. The mission statement should be actionable and provide direction for the organization's day-to-day operations. In the COVID-19 environment, the mission statement needs to be flexible enough to adjust to changing circumstances while remaining true to the organization's core values.
Organizations that have a clear vision and mission and are adaptable to changing circumstances are better positioned to succeed in this new normal. They can adjust their behavior quickly to respond to new challenges while remaining focused on their core purpose.
To know more about COVID-19 visit:
https://brainly.com/question/30975256
#SPJ11
offer your suggestions and/or caveats that managers need to consider in conducting budgeting and variance analyses amid the current pandemic period.
During the current pandemic period, managers conducting budgeting and variance analyses should prioritize flexibility, scenario planning, cost control, communication, sensitivity analysis, real-time monitoring, risk management, and long-term planning.
During the current pandemic period, managers conducting budgeting and variance analyses should consider the following suggestions and caveats:
Flexibility: The volatile and uncertain business environment calls for flexible budgeting approaches. Managers should be prepared to revise budgets and adapt to changing circumstances.Scenario Planning: Develop multiple scenarios based on different levels of impact from the pandemic. This allows for better understanding of potential outcomes and enables proactive decision-making.Cost Control: Implement rigorous cost control measures to mitigate the financial impact of the pandemic. Identify non-essential expenses and prioritize essential ones.Communication and Collaboration: Foster open communication channels with all stakeholders to gather insights, exchange ideas, and ensure alignment during budgeting and variance analysis.Sensitivity Analysis: Assess the sensitivity of budgeted figures to changes in key assumptions and variables. This helps identify potential risks and uncertainties that may impact the accuracy of the budget.In conclusion, managers conducting budgeting and variance analyses during the current pandemic period should consider factors such as flexibility, scenario planning, cost control, communication, sensitivity analysis, real-time monitoring, risk management, and long-term planning to navigate the uncertainties and challenges presented by the pandemic effectively.
For more such questions on pandemic period:
https://brainly.com/question/19123812
#SPJ11
Required Information Use the following information for the Exercises 8-10 below. (Algo) [The following information applies to the questions displayed below] Hemming Company reported the following curr
Under FIFO method, COGS, Inventory at the end and profit margin are $13,850 , $4900 and $21,350 respectively. Whereas, under LIFO method it is $16450, $2300 and $18750 respectively.
Total goods available for sale during the period:
Beginning Inventory (200 units at $10) = $2,000
1st Purchase (350 units at $15) = $ 5,250
2nd Purchase (450 units at $20) = $ 9,000
3rd Purchase (100 units at $25) = $ 2,500
Total goods purchased that are available for sale = $18,750
A. To calculate cost of good sold and Inventory at the end using FIFO:
Total goods for Sale = $18,750
Less: Inventory at the end = (4,900)
= $13,850
Inventory at the end:
Inventory in the beginning = 200 units
Total Purchases = 900 units
Total units available = 1,100 units
Less: Total Units Sold = 880 units
Inventory at the end = 220 units
Cost of Inventory at the end
100 × $25 = $2,500
20 × $20 = $2,400
220 × $22.27 = $4,900
B. To calculate COGS and Inventory at the end using LIFO:
Total goods for Sale = $18,750
Less: Inventory at the end = (2,300)
COGS = $16,450
Inventory at the end is 220 units
Cost of Inventory at the end
100 × $20 = $2,000
120 × $15 = $300
220 × 10.45 = $2,300
C. Gross Profit using FIFO & LIFO:
Sales (880 units at $40) = $35,200, $35,200
Less: COGS = $13,850, $16,450
Gross Profit = $21,350, $18,750
To learn more about FIFO:
https://brainly.com/question/16681270
#SPJ4
The complete question is:
Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 200 units at $10 = $ 2,000 Jan. 10 Sales 150 units at $40 Mar. 14 Purchase 350 units at $15 = 5,250 Mar. 15 Sales 300 units at $40 July 30 Purchase 450 units at $20 = 9,000 Oct. 5 Sales 430 units at $40 Oct. 26 Purchase 100 units at $25 = 2,500 Totals 1,100 units $ 18,750 880 units Required: Hemming uses a periodic inventory system.
(a) Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.
(b) Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.
(c) Compute the gross margin for each method.
Awla Ltd. sells two products as follows: Product A Product B Units sold 2,625 3,500 Selling price per unit $400 $350 Variable costs per unit $160 $210 The company has the following fixed costs: Product A, $590,000, Product B, $883,200, and common fixed costs of $293,200. Using the above information answer the following questions.
What is the package contribution margin? HINT: this is a dollar value so please round to the nearest penny.
What is the break-even in packages?
How many units of Product A are required to break-even? HINT: remember the entry rules for units.
How many units of Product B are required to break-even? HINT: remember the entry rules for units.
The package contribution margin is $240 for product A and $140 for product B.
The break-even in packages is 6,828.46 packages.
Approximately, 16,313.4 units of product A are required to break even.
Approximately, 19,862.3 units of product B are required to break even.
Package Contribution Margin is the contribution margin earned per package. To calculate the package contribution margin, we need to find out the contribution margin earned on a single unit and then multiply it by the number of units in each package. The package contribution margin is used to measure profitability on a per-package basis.
The formula to calculate Package contribution margin is: Package contribution margin = Contribution Margin per unit * Units per package
Part 1: Package Contribution Margin Product A
Contribution margin per unit = $400 - $160 = $240Units per package = 2,625 packages Package contribution margin = $240 * 2,625 = $630,000Product B Contribution margin per unit = $350 - $210 = $140Units per package = 3,500 packages Package contribution margin = $140 * 3,500 = $490,000
Part 2: Break-even in packages
The formula to calculate Break-even in packages is:
Break-even in packages = (Fixed Costs + Target Profit) / Package contribution margin break-even in packages = ($1,766,400) / (($630,000 + $490,000) / 2)) = 6,828.46 packages (rounded off to 2 decimal places)
Part 3: Units of Product A required to break-even
The formula to calculate units of Product A required to break even is:
Units of Product A required to break-even = (Fixed Costs + Target Profit) / Contribution margin per unit of Product A Units of Product A required to break-even = ($590,000 + $293,200) / $240 = 2,721 packages x 2,625 units per package = 16,313.4 units
Part 4: Units of Product B required to break-even
The formula to calculate units of Product B required to break even is:
Units of Product B required to break even = (Fixed Costs + Target Profit) / Contribution margin per unit of Product B Units of Product B required to break even = ($883,200 + $293,200) / $140 = 4,874.3 packages x 3,500 units per package = 19,862.3 units (rounded off to the nearest unit)Therefore, approximately 16,313.4 units of product A are required to break-even, and approximately 19,862.3 units of product B are required to break-even.
To know more about Target Profit, Visit
brainly.com/question/31465645
#SPJ11
18-1. OBJECTIVE: Discuss major provisions of the Paris Convention. Explain the importance of the Warsaw Convention. Discuss the major articles of the Chicago Conference and describe the major purpose
The Paris Convention, formally known as the Convention for the Regulation of Aerial Navigation, is a multilateral treaty signed in 1919. This treaty was established after World War I to regulate aviation and air travel. Its main objective was to create an international framework for regulating civil aviation and promote the growth of commercial aviation. Major ProvisionsThe following are the major provisions of the Paris Convention:The Convention defined the concept of the airspace above a country as belonging to that country. This gave a country the right to regulate its airspace and control flights in its airspace.The Convention also established the International Commission for Air Navigation.
This commission was created to facilitate cooperation between nations regarding aviation matters.The Paris Convention laid down the basic principles for aircraft registration and nationality.The Convention introduced the concept of “freedom of transit” which allowed aircraft from one country to pass over another country without landing.Explaining the importance of the Warsaw ConventionThe Warsaw Convention was signed in 1929 and was designed to regulate the liability of airlines in the event of accidents and other incidents. This treaty was important for several reasons. Firstly, it ensured that passengers had a means of compensation in the event of accidents. Secondly, it gave airlines a degree of protection from legal action. Major articles of the Chicago ConferenceThe Chicago Conference was a historic event that took place in 1944. The purpose of the conference was to establish a framework for the regulation of international air travel. The following are the major articles of the Chicago Conference:
Article 1: The purpose of the conference is to establish a framework for the regulation of international air travel.
Article 2: This article establishes the International Civil Aviation Organization (ICAO) which is responsible for regulating air travel.
Article 3: This article establishes the principle of sovereignty over airspace. It states that every country has complete and exclusive sovereignty over its airspace.
Article 5: This article establishes the principle of freedom of the air. It states that every country has the right to overfly other countries' airspace. The purpose of this article is to promote the growth of air travel. The major purpose of the Chicago Conference was to establish a framework for the regulation of international air travel. Its main achievement was the creation of the International Civil Aviation Organization (ICAO) which is responsible for regulating air travel.
To know more about Paris Convention visit:
https://brainly.com/question/32383328
#SPJ11
(2 points) (a) Suppose we have the following production function: Q = K1/2L1/2. Suppose K is fixed in the short-run at 16. Let r = $20 and w = $20. State the firm’s short-run cost minimization problem given the fixed input.
(4 points) (b) Derive the short-run cost function so that we have costs as a function of Q: eg C(Q) = ? Show your work/reasoning.
(4 points) (c) Show that average costs first fall then rise with greater output. You can do this in a table or mathematically. Why does AC fall then rise?
(3 points) (d) What do we mean by a shut-down price? How is the shut-down price related to average variable costs? Explain.
(2 points) (e) What is the shut-down price if r = $20 and w = $20? Explain.
(1 points)(f) Let P = $12. State the firm’s profit maximizing problem.
(4 points) (g) Find optimal output. You can do this in a table or mathematically. Should the firm shut-down? Explain.
(a) The firm's short-run cost minimization problem with fixed input is to minimize variable costs by choosing the optimal amount of labor to use in production given the fixed level of capital.
The equation to minimize variable costs is wL + rK.(b)The equation for the cost function is: C(Q) = w(4Q/K)^(1/2) + r(4Q/K)^(1/2).Here, we have substituted the value of L from Q = K1/2L1/2 which results in L = (QK)-1/2, where K is fixed and has a value of 16. Therefore, L is equal to 4(Q/K)^(1/2).After that, we substitute the values of w, r, and K to obtain the final equation. To find the derivative of this equation with respect to Q, we use the power rule, which is: dC/dQ = w/(2KQ^(1/2)) + r/(2KQ^(1/2)).
(c) The average cost curve first decreases and then increases due to the presence of fixed costs. The table below shows that when output is less than 16, average costs increase with output because the fixed cost is spread over a smaller quantity of output, which results in an increase in average cost. On the other hand, when output is more than 16, average costs decrease with output because the fixed cost is spread over a larger quantity of output, which results in a decrease in average cost.
To know more about fixed visit:
https://brainly.com/question/29819234
#SPJ11