Answer:
C) 4.2 years
Explanation:
The computation of the payback period is as follows;
As we know that
Payback Period = Initial cost ÷ Annual net cash flow
Here
Initial cost = $278000
Annual net cash flow = Incremental after tax + Depreciation per year
where,
Depreciation per year = (Original cost - Salvage value) ÷ Estimated Life
= ($278,000 - $30,000) ÷ 8 years
= $31,000
Annual net cash flow is
= $35000 + $31000
= $66000
So,
Payback Period is
= $278000 ÷ $66000
= 4.2 Years
Answer:
Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that P = ATC, P>ATC, MR =MC, or MR>MC at the optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is the efficient scale. True False
This indicates that there is a markup on marginal cost in the market for shirts. True False
Explanation:
In the long run, monopolistically-competitive entities produce at a level where marginal cost and marginal revenue are equal. This makes it impossible for individual companies to sell their products at prices above the average cost. This situation means that monopolistically-competitive companies will always earn zero economic profit in the long run.
Answer:
$1.07
Explanation:
The marginal cost measures the change in total cost of adding on more worker divided by the change in product for this additional worker (marginal product of labor). When adding one more worker, costs will increase by $80 (wage rate), while product will increase by 75. Therefore, the marginal cost is:
The marginal cost is $1.07.
Answer:
Actual Cost of Supplier A: $291.60
Actual Cost of Supplier B: $271.60
Explanation:
<u>Supplier A:</u>
Cost - 270
Shipping FOB shipping point
Purchase Discount = Invoice Price * Discount
For Supplier A, the invoice price is 270 and discount is 2/10 = 2%, so:
Purchase Discount = 270 * 0.02 = $5.4
Cost is:
270 + 27(shipping FOB point) - 5.4 = $291.60
<u>Supplier B:</u>
Cost - 280
Shipping Destination (so 0)
Purchase Discount = Invoice Price * Discount
For Supplier B, the invoice price is 280 and discount is 3%, so:
Purchase Discount = 280 * 0.03 = $8.4
Cost is:
280 - 8.4 = $271.60
