Answer:
The opportunity costs of letting your colleague to extend the loan for another month are:
- invest in oil-well venture = $5,100 x 28% = $1,428
- invest in new IT stock = $5,100 x 45% = $2,295
Your total opportunity cost depends on what you actually decide to do with the money, if you invest all of it on the oil-well venture it is $1,428, or all of it in the new IT stock it is $2,295, but if you invest 50/50 on each, then the opportunity cost would be $1,861.50, or any other possible combination.
Opportunity costs are the extra costs or benefits lost from choosing one investment or activity over another alternative.
Answer:
Epic Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Epic Electronics has chosen a<u> skimming </u>strategy.
Explanation:
Price skimming is a pricing strategy in which a marketer fixes a relatively high initial price for a product or service at first, then lowers the price over time. It is a temporal version of price discrimination/yield management.
Answer:
Unit product cost= $95
Explanation:
Giving the following information:
Direct materials $30 per unit
Direct labor $45 per unit
Variable manufacturing overhead $20 per unit
<u>Under the variable costing method, the unit product cost is calculated using the direct material, direct labor, and variable manufacturing overhead:</u>
<u></u>
Unit product cost= 30 + 45 + 20= $95
Answer:
The maximum price that a prudent investor would be willing to pay for a share of Valorous stock today is $37.92
Explanation:
In order to calculate the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today we would have to use the following formula:
Current price=future dividends*present value of discount factor(8%, time period)
Therefore, current price= $40/1.08^2 + $2.35/1.08^2 + $1.75/1.08 =
current price=$34.29+$2,01+$1,62
current price=$37.92
The maximum price that a prudent investor would be willing to pay for a share of Valorous stock today is $37.92
Answer:
The corresponding price elasticity of demand is -2.00.
Explanation:
The price elasticity of demand is obtained by differentiating the demand equation with respect to the average annual tuition fees (p).
The demand equation is q = 9,900 - 2p
Differentiating q with respect to p
dq/dp = -2 (differentiation of a constant is 0)
Therefore, the price elasticity of demand is -2.00.
