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snow_lady [41]
3 years ago
10

Division A of Barsema, Inc. has operating data as follows: Capacity 20,000 units Selling price $80 per unit Variable costs $45 p

er unit Fixed costs $20 per unit Division B wants to purchase units from Division A. If Division A agrees to sell units to Division B, A's variable costs will be $5 less per unit. If Division A has capacity available to meet B's requirements, what is the minimum price it should charge
Business
1 answer:
Neporo4naja [7]3 years ago
4 0

Answer:

the minimum price it should charge is $40 per unit.

Explanation:

Minimum Transfer Price = Variable Costs - Internal Savings + Opportunity Cost

<em>Note :  Division A has capacity available to meet B's requirements therefore there is no opportunity cost</em>.

There are Internal savings of $5 as A's variable costs will be $5 less per unit.

Minimum Transfer Price = $45 - $5

                                        = $40

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If a perfectly competitive firm finds that price is less than average variable cost, it should: shut down immediately. increase
Musya8 [376]

Answer: It should shot down immediately.

Explanation:

If the market price is equal to average cost at the profit-maximizing level of output, then the firm is making zero profits. If the market price that a perfectly competitive firm faces is below average variable cost at the profit-maximizing quantity of output, then the firm should shut down operations immediately.

4 0
3 years ago
1. Should you have a separate checking and saving account?
iris [78.8K]

Back when interest rates were high, I had just one account. I had a money-market checking account that offered good interest rates and unlimited check writing. But those days are long gone.

I want as high an interest rate as I can get for my savings. In order to get those rates, I am using a money-market savings account. All such accounts I’ve seen restrict the number of transactions I can make in a month. I need to be able to pay bills, no matter how many of them there are — and I never ever want to pay fees for excess transactions!

So I have a separate checking account. It pays less than half the interest rate of my savings account, but I can make as many transactions as I want. The bank offers a bill pay application that I use for most payments, and I can write as many checks as I want to. I can transfer money between the accounts quickly.

5 0
2 years ago
Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be $125,000 in year 1 and incre
Inessa05 [86]

Answer:

The equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually is $127,432

Explanation:

In order to calculate the equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually we would have to calculate the following formula:

equivalent uniform annual worth of the maintenance costs= P(i(1+i)∧n/(1+i)∧n-1

The rate of interest i would be as follows:

rate of interest i=(1+10%/2)-1

rate of interest i=0.1025*100

rate of interest i=10.25%

The present value P would be calculated as follows:

present value P=$125,000(1-(1+1/100)∧5 (1+10.25/100)∧-5/(10.25/100-1/100)

present value P=$125,000*3.84

present value P=$480,000

Therefore,

equivalent uniform annual worth of the maintenance costs=$480,000*(10.25/100 (1+10.25/100)∧5/(1+10.25/100)∧5-1)

equivalent uniform annual worth of the maintenance costs=$480,000*0.2654

equivalent uniform annual worth of the maintenance costs=$127,432

The equivalent uniform annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually is $127,432

5 0
3 years ago
Are there any similarities between the characteristics demanded of an entrepreneur and those of a professional athlete? Would an
pychu [463]

Answer:

The demands of an entrepreneur and a professional athlete are more comparative than one may expect.

Explanation:

Professional athlete are required to place in extended periods of time, remain submitted, deal with their bodies, keep an expert notoriety, and deal with their own image. An entrepreneur must work unusual hours, stay with their objectives, deal with themselves, arrange and keep up great associations with sellers and clients, and advance their organisation. So yes they both have similarities and an athlete can work as an entrepreneur because he knows how to work with team members and how to stay on objectives.

4 0
3 years ago
It is May 18, 2017. You have a $10,000 semi-annual bond with a coupon rate of 10.375% which matures May 5, 2044. The bond is pri
Keith_Richards [23]

Answer:

-3.91%.

Explanation:

The Duration Adjustment (% change in bond price) is given by:

= (Duration) * (Change in yield in %)

= -(7.81) x (0.5%)

= -3.91%

The Convexity Adjustment is given by:

= 0.5 * Convexity *  (Change in yield, as a fraction)^2

= 0.5 * 99.87 * (0.005)^2

= 0.5 * 99.87 * 0.000025

= 0.001248375

= 0.0012%

Thus, the convexity correction is 0.0012%

Thus, the total change in bond price = -3.91% + 0.0012% = -3.91%.

3 0
2 years ago
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