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Studentka2010 [4]
3 years ago
10

An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays

nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a ________ externality.
a. Positive
b. Negative
c. Both a & b.
Business
1 answer:
Lynna [10]3 years ago
5 0

Answer:

The correct answer is letter "A": Positive.

Explanation:

Externalities are defined as situations in which a third party is affected by the actions of an individuals or organization without the third party to be involved in the individual's or organization's operations. Though, not all the externalities are negative.  

A positive externality is one in which the third party benefits from other parties' actions. For instance, college students by studying benefit the whole society where they live by increasing the education level in that region.

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Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine ov
Aleksandr-060686 [28]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

a) Net Present Value of Alternative 1

Given that

Net Initial cash investment = $150,000

Rate of return on investment = 10%

Salvage value of old machine = $15,000  

Subsequent Cash Inflow is

= Expected Revenue Generated - Operating Cost After Overhaul

= $95,000 - $42,000

= $53,000

Year  Subsequent Cash Inflow($) Present Value Table  (10%) Present Value Of Cash Inflow($)

1 $53,000         0.909    $48,177

2 $53,000         0.826    $43,778

3 $53,000         0.751   $39,803

4 $53,000         0.683   $36,199

5 $68,000

(53,000+15,000) 0.621   $42,228

Total                      $210,185

   

Now

Net Present Value is

= Present Value of Cash Inflow - Present Value of Cash Outflow

= $210,185 - $150,000

= $60,185

b).Net Present Value of Alternative 2

Net initial cash investment = 300,000

Rate of return on investment = 10%

Cash Outflow is

= Expected Revenue Generated - Operating Cost

= $100,000 - $32,000

= $68,000

Year  Cash Outflow($) Present Value Table (10%) Present Value ($)

1         $68,000                   0.909                                $61,812

2         $68,000                  0.826                                $56,168

3         $68,000                  0.751                                $51,068

4          $68,000          0.683                                $46,444

5          $88,000          0.621                                $54,648

      ($68,000 + $20,000)

Add: Salvage value of old machine now        $29,000

Total value                                                         $299,140

Now

Net Present Value is

= Present Value of Cash Inflow - Present Value of Cash Outflow

= $299,140 - $300,000

= -$860

c).According to the analysis, we recommended alternative 1 for selecting by management as it contains positive net present value

7 0
3 years ago
Diversification means - Options A strategy for company growth by starting up or acquiring businesses outside the company s curre
nirvana33 [79]
The right answer for the question that is being asked and shown above is that: "A strategy for company growth by starting up or acquiring businesses outside the company s current products and markets." Diversification means a <span>strategy for company growth by starting up or acquiring businesses outside the company s current products and markets.</span>
8 0
3 years ago
In the Shaping Department of Vaughn Company the unit materials cost is $6.00 and the unit conversion cost is $2.00. The departme
Oksanka [162]

Answer: $31200

Explanation:

Based on the information given in the question, the total cost to be assigned to the ending work in process will be:

Material cost = 4800 × $6 = $28800

Conversion cost = 4800 × 25% × $2 = $2400

Therefore, the total cost to be assigned to the ending work in process will be:

= $28800 + $2400

= $31200

5 0
3 years ago
(root 1 + Cos A )/(root 1 minus Cos A)​
WITCHER [35]

Answer:

??????????????????????????????

5 0
3 years ago
In long-run equilibrium, a purely competitive firm will operate where price is ________.
ahrayia [7]

Answer: The correct answer is "D. equal to MR, MC, and minimum ATC.".

Explanation: In long-run equilibrium, a purely competitive firm will operate where price <u>is equal to MR, MC, and minimum ATC.</u>

In perfect competition the companies are accepting price, therefore they will produce as long as the price is equal to the marginal cost and the marginal income thus ensures that the sale of each unit of product does not cost more than the profit obtained from the sale. of this and when the average total cost, that is, the total cost of producing each unit of product, is the least possible.

4 0
3 years ago
Read 2 more answers
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