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Amanda [17]
3 years ago
10

An oil refinery must now begin sending its waste liquids through a costly treatment process before discharging them. The enginee

ring department estimates costs at $450,000 for the first year. It is estimated that if process and plant alterations are made, the waste treatment cost will decline $43,000 each year. As an alternate, a specialized firm, Hydro-Clean, has offered a contract to process the waste liquids for 15 years for $225,000 per year. Either way, there should be no need for waste treatment after 15 years. Use an 10% interest rate and annual cash flow analysis. what is the Hydro-Clean offer that should be accepted?
Business
1 answer:
WARRIOR [948]3 years ago
7 0

Answer:

Option A is the cheapest.

Explanation:

Giving the following information:

The engineering department estimates costs of $450,000 for the first year. It is estimated that if process and plant alterations are made, the waste treatment cost will decline $43,000 each year. As an alternative, a specialized firm, Hydro-Clean, has offered a contract to process the waste liquids for 15 years for $225,000 per year.

We need to use the following formula and chose the smallest net present value:

NPV= Io +∑ [Cf/(1+i)^n]

Option A:

Io= 407,000

Year cost= 43,000

NPV= 734,061

Option B:

Yearly cost= 225,000

NPV= 1,936,368

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A delivery company is considering adding another vehicle to its delivery fleet; each vehicle is rented for $100 per day. Assume
Alinara [238K]

Answer:

Marginal Revenue Product=150

Marginal Resource Cost= 100

Explanation:

Marginal revenue product (MRP) is the change in total revenue that results from a unit change of some type of variable input.

Marginal Revenue Product= Revenue Change

/Additional Input

Marginal resource cost (MRC) is the change in total cost that results from a unit change of some type of variable input.

Marginal Resource Cost= Cost Change

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In this situation we must calculate the change of revenues (MRP) and cost (MRC) when we add a new vehicle.  

We are increasing our delivery fleet in 1 unit

First calculate the change in total revenue

Total revenue= 1,500 packages * $0.10 in revenue=150

Marginal Revenue Product=$150/1=150

The Cost change is $100,

so Marginal Resource Cost= $100/1=100

3 0
3 years ago
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Readme [11.4K]
All of them but computers
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Answer:

c. comparative advantage in

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In economics, comparative advantage is the advantage a trade party has over the other party, in the production of a a particular good that has a relatively lower opportunity cost. It simply involves exploring the option that has overall best package.

North Carolina has a comparative advantage in sweet potato production relative to Florida, as the opportunity cost involved is lower, since there is little potential benefits North Carolina will get in the production of oranges.

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Answer:a

Explanation:

5 0
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