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Marat540 [252]
3 years ago
13

A different ethanol processing facility costs $800,000 to construct but will instead last forever.Every year (starting the year

after construction), it produces 10,000 barrels of ethanol and cancharge a price of $4 per barrel. At what interest rate would an investor be indifferent betweenconstructing the facility and simply keeping the money?
Business
1 answer:
iragen [17]3 years ago
8 0

Answer:

r = 5%

Explanation:

Construction cost 800.000

# of barrels produced 10.000

Price per barrel $4

let the interest rate = r

Equate the net present value = 0

800000 = 10000 x 4/(1 + r) + 40000/(1 + r)2 + .......

800000 = 10000 x 4/r

r = 5%

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Below is the complete list of accounts of Sooner Company and the related balance at the end of April. All accounts have their no
allochka39001 [22]

Answer:

                                           Trial Balance

                                                     <u>Debit</u>               <u>Credit</u>

Land                                             53000

Accounts Receivable                  5400

Cash                                              3200

Prepaid Rent                                6700

Accounts Payable                                                 3600

Deferred revenue                                                  1950

Common Stock                                                      33000

Retained earnings                                                 21250

Service Revenue                                                   24700

Salaries expense                          7500

Supplies expense                       <u>  8700  </u>            <u>              </u>

Totals                                            84500               84500                    

Explanation:

The trial balance has been made in the answer section.

3 0
2 years ago
Which of the following scenarios demonstrates the leverage effect on net operating income due to the existence of fixed costs?
morpeh [17]

Answer:

C) A 25% increase in sales resulting in a 30% increase in net operating income.

7 0
3 years ago
As a minority group member, when Naomi interacts with members of the dominant ethnic group in her culture, she is asked insensit
astraxan [27]

Answer:

(C) indifference

Explanation:

Ethno-centrism is the act of judging or prejudice shown to others because of their ethnic background.

Since Naomi was asked insensitive questions and was spoken to very slowly shows a case of low ethno-centrism.

This degree of ethno-centrism occurs when someone displays insensitivity and little hostility in their verbal and nonverbal dealings with minority groups.

4 0
3 years ago
Suppose consumers only hold checkable deposits. The demand for money for transactions by consumers is equal to Y*(0.3 - i), wher
Ksenya-84 [330]

Answer: 17.5%

Explanation:

The equilibrium will occur where the money demanded equals to the money supplied i.e Ms = Md

From the question, the supply of currency by the Central Bank = 40

Money Supply (Ms) = m × B

where m = Money multiplier = 2.5

Note that the money multiplier can also be equal to 1/rr in situations wherebt the consumers do not hold any currency.

rr = reserve ratio, = 0.4

B = monetary base = 40

Note that the monetary base here is 40.

Since reserve ratio = 0.4, therefore

m = 1/0.4 = 2.5

Therefore, Ms = m × B

= 2.5 × 40

= 100

Thus Money supply Ms = 100.

Money demand(Md) = Y(0.3 - i),

Y = income = 800

i = interest rate

Since (Md) = Y(0.3 - i),

Md = 800(0.3 - i)

Equate the equation for the money demand and money supply together.

Ms = Md

100 = 800(0.3 - i)

100 = 240 - 800i

800i = 240 - 100

800i = 140

i = 140/800

i= 0.175

= 17.5%

Therefore, the interest rate is 17.5%

5 0
3 years ago
"If Jason receives his quarterly bonus of $3,000 and spends $2,100 on a computer and puts the rest in his savings account, what
snow_lady [41]

Answer: 0.70; 0.30

Explanation:

Marginal propensity to consume(MPC) is the additional spending by an economic agent due to a rise in income while the marginal propensity to save is the additional saving by someone due to rise in income.

Increase in income = $3,000

Increase in spending = $2,100

Increase in savings = $3,000 - $2,100 = $900

MPC = $2,100/$3,000

= 0.70

MPS = $900/$3,000

= 0.30

7 0
3 years ago
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