<span>c. the retail price of everything that comes with that particular vehicle. </span>
Answer:
The correct answer is option A.
Explanation:
The constant returns to scale refer to the situation when a proportionate change in the input causes an equal proportionate change in the output level.
In this situation, the average total cost which is the ratio of the total cost of production and quantity of output produced remains the same.
The average total cost curve is a horizontal line when the firm experiences constant returns to scale.
Answer: C) the growing number of IKEA furniture stores in the United States
Explanation:
IKEA is a very popular furniture chain in the United States that keeps rising in popularity as well as adding new locations. However, it is not an American company but rather a Swedish company with it's headquarters in The Netherlands. This shows that as American companies such McDonald's, Disney and Starbucks are spreading around the world, so also are foreign companies spreading in the USA.
The defender of Globalization can point to this and show that the Americans are not only spreading around the world, but have foreign companies spreading amongst them as well making it a 2 way street.
Answer:
10,238.08
Explanation:
Data provided as per the question
Annual payment = $30,000
Implicit lease = 11%
The computation of per equal payment is shown below:-
Four equal annual payment and $1 = 3.10245
Present value = $30,000 × 3.10245
= 93,073.5
First year interest expense = 93,073.5 × 11%
= 10,238.08
Therefore the first year interest expense = 10,238.08 and hence option is not available. Also there is misprint of 11% so I corrected.
Answer:
Carriage Inc. should not invest in the new plant because the IRR of the project is less than its cost of capital.
Explanation:
The investment should NOT be made in the new plant because its internal rate of return is lower than Carriage's cost of capital.
In simple language since the return (IRR) that will be gotten from the new plant is LOWER than the cost (cost of capital), then the company is not making a profit if it invests in this new plant.
Generally, as a decision rule, a company should only invest when the IRR is higher than (or equal to) its cost of capital.