Answer: 4%
Explanation:
From the question, we are informed that Sheffield Company had an investment which cost $250000 and had a salvage value at the end of its useful life of zero and that Mussina's expected annual net income is $5000.
It should be noted that the annual rate of return is calculated as the average Income divided by the average investment. Here, the average Income is $5,000 while the average investment will be ($250,000/2) = $125,000.
Therefore, annual rate of return will be:
= $5000/$125,000
= 4%
The answer would be that the answer is true
<span>Many marginal cost curves are U-shaped., because the marginal cost i</span>s relatively high at small quantities of output and is not proportional with the production increases. <span>
Profit is maximized when marginal cost curve intersects demand from below because at any greater quantity than this marginal cost is greater than marginal revenue.</span>
Answer:
By comparing the opportunity cost of producing cheese in the two countries, you can tell that Spain has a comparative advantage in the production of cheese and Germany has a comparative advantage in the production of beer.
Explanation:
- To produce a pound of cheese, Spain gives up to the production of 3 barrels of beer, while to produce the same amount of cheese, Germany gives up to the production of 11 barrels of beer. Then, it is relatively cheaper to Spain to produce cheese, compared to Germany, because for every pound of cheese produced, Spain gives up to fewer barrels of beer. Then, Spain has a comparative advantage in the production of cheese.
- On the other hand, Germany can produce 11 barrels of beer, by giving up to 1 pound of cheese, while Spain can only produce 3 barrels of beer by giving up to one pound of cheese. Germany is more efficient producing beer, because it is relatively cheaper for German compared to Spain, producing and additional barrel of beer in terms of the cheese they do not produce when they produce more beer. Germany has a comparative advantage in the production of beer.