Henry bakes loaves of bread, which he sells for $4 each. He is considering purchasing additional mixers (capital) for his bakery
. Each additional mixer has the productivity described below. Fill in the “Marginal Product,” “Total Revenue,” and “Marginal Revenue Product” columns. Assume this is a perfectly competitive market.
Capital (mixers) Product (loaves of bread) Product(loaves of bread) Price (dollars) Revenue (dollars) Revenue Product (dollars)
0 0 — $4 $0 — 1 8 4 $ 2 20 4 3 28 4 4 34 4 5 38 4 6 40 4 7 41 4
Capital (mixers) Product (loaves of bread) Product(loaves of bread) Price (dollars) Revenue (dollars) Revenue Product (dollars)
0 0 — $4 $0 — 1 8 4 $ 2 20 4 3 28 4 4 34 4 5 38 4 6 40 4 7 41 4
1 answer:
Answer: The complete table is as follows:
Explanation:
The following are the formulas for calculating marginal product , total revenue and marginal revenue product:
Marginal product =
Total revenue = Price × Quantity
Marginal revenue Product = Marginal product × Price
By using these formulas, I have completed the following table:
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Answer:
5.925%
Explanation:
For computing the cost of debt, first we have to determine the YTM by using the Rate formula that is shown in the attachment
Given that,
Present value = $1,050
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 8% = $80
NPER = 20 year - 1 year = 19 year
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 7.50%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 7.50% × ( 1 - 0.21)
= 5.925%
