What is pure competition?

assume that monty completed the office and warehouse building on december 31, 2020, as planned at a total cost of $7,280,000, an

Eva8 [605]

Answer:

AI = $1,424,864

Hence, the avoidable interest for the Monty's project is $1,424,864.

Explanation:

Note: This question is incomplete and lacks necessary data to answer this question. But I have found similar question on the internet and will be using its data in this question to answer for the sack of concept and understanding. Thank you!

Data Given:

Total Cost = $7,280,000

Weighted-Average amount = $5,040,000

We need to compute the avoidable interest on this project.

Data Missing:

Construction loan amount = $2,800,000

Construction loan Interest Rate = 12%

Construction loan Time period = Semi-Annually.

Construction loan Issued = 31 Dec, 2019

Short-term loan amount = $1,960,000

Short-term loan interest 10%

Short-term loan Time period = Monthly payable

Short-term loan Maturity period = 30 May, 2021

Long-term loan amount = $1,400,000

Long-term loan interest rate = 11%

Long-term loan Time period = Annually on 1st January

Long-term loan Principal Payable = 1 Jan, 2024

Solution:

Now, this question is complete and can be solved.

First of all, we need to calculate the general borrowings in construction of the building.

Let X be the general borrowings in construction of the building.

Let Y be Weighted average

Let Z be the Construction for whole year

Where, Y = $5,040,000

Z = $2,800,000

So,

X = Y - Z

X = $5,040,000 - $2,800,000

X = $2,240,000 (This is the general borrowings)

Now, we have to calculate the weighted average interest rate in order to calculate the avoidable interest on this project.

Weighted average interest rate = (Short term loan interest rate x short term loan amount divided by Sum of total loan including short and long) + (long term load interest rate x long term loan amount divided by the sum of total loan)

Let A be the Weighted average interest rate.

So,

A = (10 * $1,960,000/($1,960,000 + $1,400,0000) + ($11% * $1,400,000/($1,960,000 + $1,400,0000) )

A = 48.61%

Now, we just have to put in the values to find out the avoidable interest.

Let Avoidable interest = AI

AI = ($2,800,000 x 0.12) + ($2,240,000 x 0.4861)

AI = $1,424,864

Hence, the avoidable interest for the Monty's project is $1,424,864.

7 0

3 years ago

Americans often equate "bigger" with "better," and prefer larger cars, TV screens, homes, even meals. Researchers suspect that i

STALIN [3.7K]

Answer:

The correct answer is letter "A": psychological.

Explanation:

The tendency individuals prefer larger objects while making purchases could reflect their <em>psychological </em>need for protection. Some people believe the bigger or the more of something the merrier. In certain aspects, it could be true since, for instance, having larger savings instead of expenses provides individuals more possibilities not to be critically affected by economic hardship. Though in some other aspects such as technology, day by day devices are smaller but their features are enhanced.

Thus, <em>as the perception of owning larger stuff is psychological, it is merely subjective.</em>

4 0

3 years ago

Corey wants to reorganize the company. Currently there are HR units at each plant, fiscal units at each plant, and purchasing un

lana [24]

Answer:No, because even though the company will be able to save on payroll the costs of travel will be increased

Explanation:

Centralizing the support functions of a business such as Human Resources, fiscal and purchasing units can reduce costs, create consistency and reduce duplication of duties.

However, in this case where the business needs to deploy staff of these units to each plant occasionally, the travel expenses and negative effect on the staff will outweigh the money saved.

6 0

3 years ago

The Heather Honey Company purchases honeycombs from beekeepers for $2.00 a pound. The company produces two main products from th

crimeas [40]

Answer:

a. $0.98

b. 6,000 container

Explanation:

a. The computation of the incremental contribution margin per container is shown below:

= Drop selling price - total variable manufacturing cost - drop selling price × sales commission - sale value in raw form × basis

= $4.40 - $0.95 - $4.4 × 5% - 3 × 3 ÷ 4

= $0.98

b. The minimum number of containers of candy sold each month is

= (Per month salary paid to sales person + Master candy maker salary) ÷ ( incremental contribution margin per container)

= ($2,000 + $3,880) ÷ $0.98

= 6,000 container

We simply applied the above formulas so that the a and b part could arrive

6 0

3 years ago

Judd Corporation has a weighted average cost of capital of 10.25%, and its value of operations is $57.50 million. Free cash flow

earnstyle [38]

Answer:

The expected year-end free cash flow is $2.44 million

Explanation:

The formula to compute free cash flow is shown below:

Value of operations = (free cash flow) ÷ (weighted average cost of capital - growth rate)

$57.50 million = free cash flow ÷ (10.25% - 6.00%)

$57.50 million = free cash flow ÷ 4.25%

So, free cash flow equal to

= $2.44 million

The growth rate should always be deducted from the weighted average cost of capital in computing the year ending free cash flow.

6 0

3 years ago