Answer:
Option E.
Explanation:
In free trade, a country with a comparative advantage in a good produces that good in the long-term. Therefore, if these people are working in an industry in which it has a higher opportunity cost i.e. it does not have a comparative advantage; they will eventually see job loss or fall in income or both. On other hand, when they purchase goods which has lower opportunity costs in foreign, they get access to these at a lower price and can purchase a higher quantity. So, these people are both harmed and benefitted by free trade.
The <u>discount rate</u> is management's minimum desired rate of return on capital investment.
Discount rate. "management's minimum preferred rate of return on an investment'' is greatly described by using the following terms authentic. Internet gift price and the internal rate of return are examples of discounted cash waft fashions utilized in capital budgeting decisions. NPV will continually decrease.
When evaluating capital funding initiatives, if the inner fee of going back is much less than the required rate of return, the undertaking can be commonplace. Whilst selecting a capital investment task from three options, the undertaking with the best internet present cost will constantly be optimal.
The payback method commonly specializes in profitability and no longer time. One advantage of the internal rate of return is that it considers the time price of money. One drawback of the payback method is that it no longer considers the time value of money.
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Answer:
Here is the questions with options
A company is trying to decide whether to keep or drop the organic foods department in its grocery store. If organic foods are dropped, the manager will be laid off. What is the manager's salary in relation to the decision to keep or drop the department?
A. A variable cost and therefore relevant
B. Avoidable and therefore incremental
C. Sunk and therefore not relevant
D. A fixed cost and therefore not relevant
The answer is B. Avoidable and therefore incremental
Explanation:
An avoidable cost are cost that can be eliminated when a particular activity is no longer performed. They are variable cost that can be eliminated from the business operation by not producing a particular goods.
On the other hand, an incremental cost is the difference in total costs as the result of a change in some activity.
If the company decides to dropped the organic department, the payment made to the manager is automatically eliminated, Thus making such cost become an avoidable cost, because it can be eliminated.
Hence the best answer is B. Avoidable and therefore incremental
Answer: Fall in revenue
Explanation:
A decrease in demand means a lower level of demand compare to the previous period. A price taking firm means that the firm cannot determine the price in the market. Profit maximising level of output means the output level that gives the highest profit.
A fall in demand without an increase in price at a profit maximising level of output will lead to a fall in revenue and profit all things being equal.
