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erik [133]
3 years ago
12

Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment for ​$1

00 comma 000100,000 a​ year, and he pays workers ​$100 comma 000100,000 in wages. In​ return, he produces 100 comma 000100,000 baskets of peaches per​ year, which sell for ​$3.003.00 each. Suppose the interest rate on savings is 55 percent and that the farmer could otherwise have earned ​$25 comma 00025,000 as a shoe salesman. What is the​ farmer's economic​ profit
Business
1 answer:
mina [271]3 years ago
8 0

Answer:

-$475,000

Explanation:

Total revenue = Baskets of peaches × Price

                       = 100,000 × $3

                       = $300,000

Explicit cost:

= Rent equipment + wages

= $100,000 + $100,000

= $200,000

Implicit cost:

= Land × Interest + salesman earned

=  $1,000,000 × 0.55 + $25,000

= $575,000

Total cost = Explicit cost: + Implicit cost

                = $200,000 + $575,000

                = $775,000

Economic profit = Total revenue - Total cost

                           = $300,000 - $775,000

                           = -$475,000

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Your grandparents put $10,200 into an account so that you would have spending money in college. You put the money into an accoun
expeople1 [14]

Answer:

Monthly withdrawal = $ 231.17 per month

Explanation:

Below is the calculation:

Deposit amount in the bank = $10200

Interest rate earned by the deposit = 4.19%

Monthly interest rate = 4.19% / 12 = 0.34917%

Number of periods = 4 years x 12 = 48

Amount in the account = Monthly withdrawal x (P/A, 0.34917%, 48)

10200 = Monthly withdrawal x 44.12246

Monthly withdrawal = 10200/44.12246

Monthly withdrawal = $ 231.17 per month

5 0
3 years ago
150-seat restaurant $8,000,000 is needed to construct the restaurant; no additional investment is needed in working capital.
goldenfox [79]

Answer:

The answer is $7400000

Explanation:

Solution

Recall that:

There is  no information is given about per unit cost or sales price hence, a reverse calculation is to be made to find out the projected total revenue.

Now,

The reverse calculation to find sales is computed as follows:

Begin from the expected profit + Tax expenses + Interest Expenses + undistributed expenses + variable cost

Thus,

From the calculation of each term is as stated below:

1. The profit expected = 15% return on their investment. it is to be after tax return, total investment = $8000000,

So,

The Profit expected  = $8000000 *15% = $1200000.

2. The tax xxpenses = 25% that is, it should be 25% on taxable profit which is  decreased from it and then net profit after tax is available,

Thus,

we have net profit after tax we can compute the  taxable profit as = $1200000 / 75% = $1600000.  for example, tax amount on taxable profit = $160000 * 25% = $400000.

3. The Interest Expenses = 5% of borrowed fund from bank,

Now,

The  borrowed fund from bank = $2000000 (8000000-6000000)

The expenses interest = $ 100000 ($2000000*5%)

4. Undistributed Expenses is stated as follows:

The Undistributed expenses are given in the question = $2000000.

5. Variable cost that is the labor cost and cost of food :

From the question it is given that it is 50% of the sales, which means the remaining 50% is the contribution.

Now

The contribution on reverse calculation is  computed as:

Profit +taxes + Interest + fixed expenses

Contribution = 1200000 + 400000 + 100000 + 2000000 = $ 3700000,

Thus,

We say,let the sales be 10 , then variable cost be 50 and contribution is 50, that means variable cost = contribution in this case.

so, in proportional calculation , the variable cost = $3700000 .

Thus

The projected sales = expected profit + Tax expenses + Interest Expenses + undistributed expenses + variable cost

The total revenue projected =$1200000+ $ 400000 + $100000 + $ 2000000 +$ 3700000

Therefore, the total revenue projected = $ 7400000

3 0
3 years ago
What is one good way to find out how well prospects will do a job?
amid [387]

Answer:

do an interview

Explanation:

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7 0
2 years ago
Read 2 more answers
You’ve borrowed $23,072 on margin to buy shares in Ixnay, which is now selling at $41.2 per share. You invest 1,120 shares. Your
BlackZzzverrR [31]

Answer:

(a) Since the percentage margin is more than maintenance margin, there would be no call

(b) A margin call would be received when the price is $15.26

Explanation:

(a) Total investment = $23,072 × \frac{100}{50} = $46,144

Total shares = Total investment ÷ share price

= $46,144 ÷ $41.2 = 1,120

Value of share in market = new price × number of shares

= $41 × 1,120

= $45,920

Value of equity = Value of share in the market - borrowed cash

= $45,920 - $23,072

= $22,848

Percentage margin = Value of equity ÷ Value of shares

= ($22,848 ÷ $45,920) × 100%

= 49.76%

(b) Total number of shares = 1,120

Assumed value of shares = $1,120X

Borrowed fund = $23,072

Value of equity = $1,120X - $23,072

Margin = Value of equity ÷ Value of shares

0.35 = ($1,120X - $23,072) ÷ $1,120X

392X = $1,120X - $23,072

1512X = $23,072

X = $15.26

7 0
2 years ago
Part II. Explain the following concepts:
tresset_1 [31]

Answer:

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3 0
2 years ago
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