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stealth61 [152]
3 years ago
9

A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. Thi

s firm is earning $5.50 on every $50 invested by its founders.
a. What is its percentage rate of return? 11 percent.
b. Is the firm earning an economic profit? Yes If so, how large? 6 percent.
c. Will this industry see entry or exit? Entry
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
Business
1 answer:
Nadya [2.5K]3 years ago
4 0

Answer: The answers are given below

Explanation:

a. What is its percentage rate of return?

From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:

= $5.50/$50 × 100%

= 0.11 × 100%

= 11%

b. Is the firm earning an economic profit? If so, how large?

The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:

= 11% - 5%

= 6%

The firm is earning economic profit of 6%.

c. Will this industry see entry or exit?

There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.

d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?

The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.

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Alex787 [66]

Answer:

$1,033,190.69 ; better

Explanation:

Given:

Present value of cash flow of Project A (PV) = $5,200,000

Maturity (nper) = 7 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 7, -5200000)

=$1,033,190.69

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project A is $1,033,190.69

Project B:

Given:

Present value of cash flow of Project A (PV) = $3,800,000

Maturity (nper) = 5 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 5, -3800000)

=$976,951.34

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project B is $976,951.34

Annual annuity of Project is more than that of Project B, So Project A is better than Project B.

8 0
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Patrick has chosen to double major in finance and microbiology and studies 14 hours a day as a result. To make it through his st
Varvara68 [4.7K]

Answer:

D) The extra energy benefits Patrick gets from another can are no longer worth the cost. MB/MC (S)

Explanation:

The optimal quantity for Patrick to consume is 5 cans of GreenCow.

This is the quantity where MARGINAL BENEFIT EQUALS MARGINAL COST. For all quantities up to the 5th, the marginal benefit is higher than the marginal cost. This means that Patrick's net benefit is increasing, and consuming all units up to this point make him better off.

If Patrick were to consume any more than 5 cans of GreenCow, the cost of each additional can would be higher than the additional benefit (because the marginal cost curve is higher than the marginal benefit curve). Consuming any cans beyond the 5th, therefore, makes him worse off.

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A contract or ________ stipulates in writing all the client's requirements and gives all of the relevant information.
Scrat [10]

It should be noted that contract or event profile is usually stipulated in writing all the client's requirements and gives all of the relevant information.

An event profile can be regarded as set of event scripts, which helps to give description about an event.

This profile or contract do list out all the requirements that is needed by a company from the client in executing their services.

Therefore, contract or event profile serves  all the client's requirements and gives all of the relevant information.

Learn more about contract or event profile at:

brainly.com/question/24858866

7 0
2 years ago
For most people, the purchase of a Ford automobile would employ which type of consumer decision making?
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Answer:

Extended decision making

Explanation:

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5 0
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drek231 [11]

Answer:

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Explanation:

i just finished the test

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