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Feliz [49]
3 years ago
7

Fred is thinking of starting a bowling alley near a college campus. Fred is an expected utility maximizer with utility function:

U(W) = 1 – (3000/W), where W is his wealth. Fred’s total wealth is $12,000. With probability 0.2 the alley will be a failure and he’ll lose $9,000, so that his wealth will be just $3,000. With probability 0.8 it will succeed and his wealth will grow to $X. What is the smallest value of X that would be sufficient to make Fred want to invest in the bowling alley rather than have a wealth of $12,000 with certainty?
Business
1 answer:
vlada-n [284]3 years ago
5 0

Answer:

$14,250

Explanation:

To determine what amount of money will make Fred take his chances and invest in this new business, we first have to solve this equation:

  • current wealth - (% chance of losing money x wealth after losing money)

$12,000 - (20% x $3,000) = $12,000 - $600 = $11,400

Then:

$11,400 / 80% of getting wealthier = $14,250

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A number of activities that are a part of a company's quality control system are listed below.
Karolina [17]

Answer:

Following is the classification of  the costs associated with each of these activities that is prevention cost, appraisal cost, internal failure cost, or external failure cost.

(a) Product testing  - Appraisal Cost

(b) Product recall  - External Failures

(c) Product design  - Prevention cost

(d) Quality circle  - Prevention cost

(e) Inspection of goods - Appraisal Cost

Explantion cost:

Appraisal costs are costs incurred to detect defects in the poduct produce. Prevention cost are cost incurred to prevent detects in the product produce.

Internal failure costs are costs incurred to remove defects found before the customer receives the product or service. External failure costs are costs incurred to remove defects found after the customer receives the product or service.

8 0
3 years ago
The first known application of marketing research to a business marketing/advertising problem was conducted by:
ehidna [41]

Answer:

An advertising agency.

Explanation:

  • N. W. Ayer & Son was a Philadelphia advertising agency that was formed in 1869 and was the first advertising agency that created various notable slogans and founded by the Francis W.A, and they worked in groups knows as the creative teams.
7 0
3 years ago
Snow Cap Company has a unit selling price of $250, variable costs per unit of $170, and fixed costs of $160,000. Compute the bre
snow_tiger [21]

The break-even point in units using the mathematical equation  is 2,000 in units and the unit contribution margin is 80 per unit.

<h3>Break even points in units</h3>

a. Break-even point in unit

Using this formula

Break-even point in unit=Fixed cost/(Selling price-Variable cost)

TC = FC + VC

Sales - TC = Net Income

Sales - TC = 0

Sales - FC - VC = 0

2500(Q)-160,000-170(Q) = 0

80(Q)-160,000 = 0

80(Q)=160,000

Q=160,000/80

Q=2,000 break-even in units

b. Unit contribution margin

Unit contribution margin = Selling price- Variable cost

Unit contribution margin= $250 - $170

Unit contribution margin =$80 per unit

Inconclusion the break-even point in units using the mathematical equation  is 2,000 in units and the unit contribution margin is 80 per unit.

Learn more about break-even point here:brainly.com/question/9212451

8 0
2 years ago
The rental income generated by a lease can depend significantly on the proportion of property-level operating expenses paid by t
yanalaym [24]

Answer:

4) Triple net lease

Explanation:

In a triple net lease (NNN lease), the tenant is responsible for all the expenses related to the leased property including property taxes, maintenance fees, reparations and property insurance. NNN leases are usually commercial leases only.

The landlord's disadvantage with a NNN lease is that the monthly lease payment tends to be lower since the tenant assumes all the costs related to the leased property. On the other hand, a NNN lease generally provides a stable cash flow, so its associated risk is lower.

4 0
3 years ago
Productivity is defined as the quantity of a. labor required to produce one unit of goods and services. b. goods and services pr
Bumek [7]

Answer:

Option (C) is correct.

Explanation:

Productivity of labor refers to the term which is used by the firms for knowing the efficiency of the labor employed into the production of the output.

Productivity is determined by dividing the output of the firm by the inputs used in the production of the goods and services.

Productivity = (Output ÷ Input)

If the productivity of the labor is not achieved as per the company requirement then there is a fall in the labor employment.

8 0
3 years ago
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