Answer:
$12,500
Explanation:
Differential revenue = Alternative A revenue - Alternative B revenue
Differential revenue = $75,000 - $62,500
Differential revenue = $12,500
Thus, the differential revenue for this decision is $12,500
Answer:
Short term loan
Explanation:
Lemonade stand can be regarded as a small business, Hence, the loan that suit the business is " Short term loan".
Short term loan can be regarded as loan that can be obtained to give support to ones personal as well as business capital. It is designed for the needs of small business capital with less interest compare to long term loan. The period of payment is usually within a year. It is of low risk and good profit.
The rate of return I would earn if you bought the asset is 16.91.
<h3>What is the internal rate of return?</h3>
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested. It is a capital budgeting method.
IRR can be calculated with a financial calculator
- Cash flow in year 0 = $-5250
- Cash flow in year 1 = $750
- Cash flow in year 2 = $1000
- Cash flow in year 3 = $850
- Cash flow in year 4 = $6250
IRR = 16.91%
To learn more about the internal rate of return, please check: brainly.com/question/24172627
Solution :
1.
The income from renting his showroom that Paolo would receive if he allowed to rent his showroom is a Implicit cost as this is a cost which will not be paid in actual.
The wages as well as the utility bills paid by Paolo is an example of explicit cost as this cost would be paid in actual for the businesses and are added in accounting.
The wholesale amount that Paolo pays for the pianos to the manufacturer is an explicit cost and is aid in actual to the manufacturer.
The salary that Paolo could have earned if he choses to be an accountant will be an implicit cost as this cost is not paid in actual.
2. Paolo's accounting profit can be calculated by :
Accounting profit = revenue - explicit cost
= 851,000 - 476,000 - 281,000
= $ 94,000
3. Paolo's economic profit is :
Economic profit = accounting profit - implicit profit
= 94,000 - 34,000 - 71,000
= -11,000
False for sure you don't immediately stop when you let off the brake pedal.
