Answer:
C. maximize total profit by maximizing profit for each group separately
Explanation:
Price discrimination is when a seller sells the same quantity and quality of goods and services to different groups of consumers at different prices.
Price is usually set higher than marginal cost for a price discriminator.
I hope my answer helps you.
Answer:
B. No, no free entry
Explanation:
With a patent granted to one pharmaceutical company to produce and sell an experimental AIDs drug, all doors of free entry and exit have been locked against other pharmaceutical companies. This implies that one of the major ideals of a competitive market is violated. Without free entry and exit, there cannot be many sellers, and we cannot discuss about the possibility of firms producing identical products because there is only one drug.
Answer:
The amount that is needed to be covered by the policy is $3,500
Explanation:
Coverage B - Other kind of structures offer coverage for the real property which is to be located on the desired location and need to be separated from the dwelling through clear space.
Coverage A- upto 10%
So, in the situation, $8,000 is involved for other structures. Lightning is covered under the peril so that the policy will pay an amount of $3,500 (Which is $4,000 [$3,000 + $1,000] - $500)
Answer:
It seems that something is missing in question i.e b) what is the after state taxes profit in the state with the 2% tax rate.
Answer for both requirement is given below in explanation with calculation.
Explanation:
A) After tax profit where state tax is 10%
The after tax profit will be 1,278,000$ (1420000*90%)
B) After tax profit where state tax is 2%
the after tax profit will be 1,352,400$ (1380000*98%)
So we can conclude that option 2 is better because it gives greater after tax profit.
Answer:
a. Internal Rate of Return
Annual Cash Inflows = (Net Savings - Depreciation) * ( 1 - Tax Rate) + (Depreciation * Tax Rate)
Net savings = Delivery Costs - Operating and Maintenance Costs with the Used Truck
= 32,000 - 21,000
= $11,000
Depreciation = (Cost of used truck - Salvage value) / Useful life
= (13,000 - 2,000) / 3
= $3,667
Annual Cash inflows = $7,000 as there are no taxes.
Use Excel to calculate IRR as shown in the attachment.
The cost of the truck is the outflow and the savings and the salvage value are inflows which means that the last inflow will be $13,000 because salvage value is added in the last year.
IRR = 69.408%
b. If the IRR is greater than the cost of capital or required rate of return, the project should be chosen.
c. The IRR of 69.408% is greater than the MARR of 34% so Nancy should buy the truck.
