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nordsb [41]
3 years ago
14

You have just completed a $ 24 comma 000 feasibility study for a new coffee shop in some retail space you own. You bought the sp

ace two years ago for $ 98 comma 000​, and if you sold it​ today, you would net $ 112 comma 000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $ 33 comma 000 plus an initial investment of $ 5 comma 300 in inventory. What is the correct initial cash flow for your analysis of the coffee shop​ opportunity?
Business
1 answer:
ikadub [295]3 years ago
6 0

Answer:

$150,300

Explanation:

The computation of the correct initial cash flow is shown below:

= Capital expenditure + net after taxes + initial investment in inventory

= $33,000 + $112,000 + $5,300

= $150,300

The net after taxes is also term as opportunity cost

And, the initial investment in inventory is also term as change in working capital

All other information which is given is not relevant. Hence, ignored it

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Answer:

Rest of question:

... equals marginal cost.

Firms will maximize profits at the point where marginal revenue equals marginal cost because producing after this point means that no profits will be made.

As long as the Marginal revenue exceeds marginal cost, there will be profits made because the company is making more than it is spending so they should keep producing. When it gets to a point in production where the marginal revenue equals marginal cost, the company should not produce further than that.

This is because, as earlier mentioned, any further production would result in the marginal cost being larger than the marginal revenue which means that a loss will be made. The company should therefore stop at the point where MR = MC so as not to let MC get larger than MR so that no losses will be made.

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Answer:

retaliation.

Explanation:

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Answer:

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