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ikadub [295]
3 years ago
13

Maurice can drive or fly from Jacksonville, Florida to Atlanda, Georgia, for a one-day business trip. If he drives, he will be a

ble to work three hours once he arrives in Atlanta, whereas traveling by plane will enable him to work eight hours. His expected income from each hour of work in Atlanta is $30. If Maurice is a rational decision maker, he will fly if and only if the price differential (air cost minus driving cost) is less than.
a. $30.
b. $90.
c. $150.
d. $240.
Business
1 answer:
ArbitrLikvidat [17]3 years ago
8 0

Answer:

c. $150.

Explanation:

the extra amount of hours Maurice can work taking a flight will be of 5 hours

(8 hours taking a plane against 3 hours if driving)

As the income per hour is 30 dollar it can generate;

5 hours x $30 per hour = $150

Maurice will only travel by plane if it generates the same or more income than the driving thus, a differencial price of less than 150 dollars will provide Maurice with a net gain. Also we should consider that if Maurice drives his car it is taking a depreication hit per mile while driving that is being ignoer to keep the assignment simple. But considering that the amount of differential income could be higher than $150

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Oak Island Amusements Center provides the following data on the costs of maintenance and the number of visitors for the last thr
Semmy [17]

Answer:

a. (i) $1.40

(ii) $190,000

b. $3,410,000

Explanation:

The computation of fixed cost of maintenance annually and the variable cost of maintenance per visitor is shown below:-

a. (i) Variable cost per visitor = (Maintenance cost at highest number of visitors - Maintenance cost at lowest number of visitors) ÷ (Highest number of visitor - Lowest number of visitor)

= ($3,830,000 - $2,773,000) ÷ ($2,600,000 - $1,845,000)

= $1,057,000 ÷ $755,000

= $1.40

(ii) Fixed cost of maintenance = Total costs - Variable cost at that level

= $2,773,000 - $1,845,000 × $1.40

= $2,773,000 - $2,583,000

= $190,000

b. The computation of estimated maintenance costs is shown below:-

Estimated maintenance costs = Fixed costs + Variable cost per visitors × Number of visitors

= $190,000 + 2,300,000 × $1.40

= $190,000 + $3,220,000

= $3,410,000

6 0
3 years ago
St.​ Mark's Square is a beautiful plaza in Venice that is often frequented by both tourists and pigeons. Ringing the piazza are
Artist 52 [7]

Answer and explanation:

Location is one of the many factors businesses must consider at the moment of starting operations. Commercial areas tend to have higher rent and property prices. Typically, businessmen deal with it by increasing their products price so they can cover expenditures and make a profit. At the same time, most consumers are willing to pay the higher price for the product because it removes the need for relocation even if it could imply moving one or two blocks away.

5 0
2 years ago
During 2018, Skechers USA had Sales of $1,846.4, Gross profit of $818.8 million and Selling, General and Administration expenses
sveta [45]

Answer:

The answer is $1,027.6 million

Explanation:

Gross profit = Sales - Cost of Sales(cost of goods sold)

Gross profit = $818.8 million

Sales of $1,846.4 million.

To find Cost of Sales, we rearrange the formula to now be:

Sales - Gross profit

$1,846.4 million - $818.8 million

=$1,027.6 million

Therefore, Skechers' Cost of sales for 2018 is $1,027.6 million

4 0
3 years ago
A company has a $20 million portfolio with a beta of 1.2. It would like to use futures contracts on a stock index to hedge its r
11111nata11111 [884]

Answer: 88.89 or 89

Explanation: Futures contract refers to a legal binding which obligates a buyer and seller to transact about a commodity, good, security or services at a predetermined price but goods are delivered or paid for in the future.

Given the following ;

Portfolio value(p) = $20million

Portfolio Beta (b) = 1.2

Index price (i) = 1080

Multiplier = 250

Future value(A) = index price × multiplier

Future value(A) = 1080 × 250 = 270000

Number of contracts (N) = (portfolio value × portfolio Beta) ÷ future value

N = ($20,000,000×1.2)÷270000

N = 24000000 ÷×270000

N = 88.8888=88.89

N = 89 (NEAREST whole number)

7 0
3 years ago
Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm mainta
KATRIN_1 [288]

Answer:

Option E is correct. Pay out ratio is 73.74 %

Explanation:

Payout ratio shows how much portion of the net earning the company pay to its shareholders in form of cash dividend. Higher pay out ratio implies that company pay large portion of its earning to shareholder.

Mathematically, pay out ratio is = 1 - Retention Ratio ------ (a)

Retention ration shows portion of the earning that the company has retained for future investment or operation or growth.

Given data

Growth rate = 5 % or 0.05

Debt to equity ratio = 0.55

Assets turn over = 1.30

Profit Margin = 9 % or 0.09

Retention ration can be calculated from sustainable growth ratio formula.

Sustainable growth rate = Retention ratio x Return on equity

Sustainable growth rate means the growth rate that the company wants to maintain in future.

Retention ratio = Sustainable growth rate / Return on equity ---- (b)

Return on equity is not given the question but it can be calculated from Du Pont equation.

According to Du Pont equation,

Return on Equity = Profit Margin x Assets Turn Over x Financial leverage

Return on Equity = 0.09 x 1.30 x ( 1 + 0.55) = 0.18135

Let r be retention ratio, Then

Sustainable growth rate = (0.18135 x r)/ ( 1- (0.18135 x r))

0.05 = (0.18135 x r)/ ( 1- (0.18135 x r))

r = 0.2626 = Retention ratio

Putting the value of retention ratio in equation (a)

Payout ratio = 1 - Retention ratio = 1 - 0.2626 = 0.7374 or 73.74 %.

 

4 0
2 years ago
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