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2 years ago

In the field of economics, the additional cost associated with one more unit of something is called a(n)?

1 answer:

3 0

In the field of economics, the additional cost associated with one more unit of something is called a(n) marginal cost.

This is further explained below.

<h3>What is marginal cost.?</h3>

Generally, The change in the overall cost that occurs as a result of an increase in the amount produced is referred to as the marginal cost.

This is also referred to as the cost of producing an extra quantity.

In conclusion, In the study of economics, the term "marginal cost" refers to the extra expense incurred by producing one more unit of a certain product or service.

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The general pattern that consumption of the first few units of any good tends to bring a higher level of _______ to a person tha

ch4aika [34]

Answer:

1. utility

Explanation:

The law of diminishing marginal utility states that as consumption increases, the utility derived from consumption falls.

I hope my answer helps you

6 0

4 years ago

What is the price paid for the use of borrowed money referred to as?

marshall27 [118]

Interest
Interest is the monetary charge for borrowing money—generally expressed as a percentage, such as an annual percentage rate (APR). Key factors affecting interest rates include inflation rate, length of time the money is borrowed, liquidity, and risk of default. Interest can also express ownership in a company.

3 0

3 years ago

P13–11 EPS calculations Southland Industries has $60,000 of 6% (annual interest) bonds outstanding, 1,500 shares of preferred st

777dan777 [17]

Answer:

$1.28

Explanation:

The computation of the earning per share is shown below:

As we know that

Earning per share = Net income ÷ Number of shares outstanding

where,

Net income is

Earning before interest and taxes $24,600

Less: Interest

($60,000 × 6%) - $3,600

Income before tax $21,000

Less: tax for 40% - $8,400

Earning after tax $12,600

Less: Preference dividend

(1,500 shares × $5) -$7,500

Income available $5,100

So the earning per share is

= $5,100 ÷ $4,000

= $1.28

3 0

3 years ago

The total market value of the equity of ITM is $6 million, and the total value of its debt is $4

timofeeve [1]

Answer:

a. The required rate of return on Okefenokee stock is 16%.

b. WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. The required rate of return on Okefenokee's new venture is Ke = 18 %.

Explanation:

Here the given is,

E = $6 million, D = $4 million, Beta = 1.2,

Rmp = the expected risk premium on the market =10%.

Rf = The Treasury bill rate = 4%

a. The required rate of return on Okefenokee stock,

$Ke = Rf + Beta \times Rmp = 4 + 1.2 \times 10 = 16%$ %.

b. Tax rate, T = 40%

The proportion of debt = $Wd = D / (D + E) = 4 / (6 + 4) = 0.4$

Proportion of equity, We = 1 - Wd = 1 - 0.4 = 0.6

Cost of debt, Kd = Risk-free rate as debt is free of default = 4%

$WACC = Wd \times Kd \times (1 - T) + We\times Ke\\\\ = 0.4 \times4\times (1 - 40) + 0.6 \times 16\\\\ = 10.56%$

WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. Suppose the company wants to diversify into the manufacture of rose-colored glasses. The beta of optical manufacturers with no debt outstanding is 1.4. What is the required rate of return on Okefenokee's new venture? (You should assume that the risky project will not enable the firm to issue an additional debt)

$Ke = Rf + Beta \times Rmp\\\\Ke = 4 + 1.4 \times 10 = 18%$

Ke = 18 %.

5 0

3 years ago

Schrute Farm Sales buys portable generators for $ 470 and sells them for $ 720 He pays a sales commission of 5% of sales revenu

tigry1 [53]

Answer:

The contribution margin statement is found below with a contribution margin of $149,800 and operating income of $145100

Explanation:

Contribution Margin Statement

Sales revenue ($720*700) $504000

Variable costs:

Cost of generators($470*700) ($329000)

Commission(5%*$504000) <u> ($25200)</u>

Contribution margin $149,800

Fixed costs

Rent ($3000)

Additional commission <u> ($1,700)</u>

Operating income $145100

Cost of rent is fixed as it is not depended on the quantity of generators sold.

Additional commission is fixed amount,so it is a fixed cost, while costs of buying generators as well as the commission of 5% are both variable costs.

5 0

3 years ago