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Allushta [10]
3 years ago
9

You rent a car for $29.95. The first 150 miles are free, but each mile thereafter costs 15 cents. You plan to drive it 200 miles

. What is the marginal cost of driving the car beyond the first 150 free miles?
Business
1 answer:
kari74 [83]3 years ago
5 0

Answer:

marginal cost is 15 cents

Explanation:

given data

car rent = $29.95

distance d1 = 150 miles

cost = 15 cents per miles

distance d2 = 200 miles

to find out

marginal cost

solution

first we find here cost for driving d2

cost for 150 to 200 miles  = 15 × 50

cost for 150 to 200 miles  = 750 cents = $7.5

so

cost for driving d2  = $7.5 + $29.95

cost for driving d2 = $37.45

so

marginal cost will be

marginal cost = change in cost / chance in distance

marginal cost = 37.45 - 39.95   /   ( 200-150)

marginal cost = 7.5 / 50  = 0.15

marginal cost is 15 cents

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Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose
amm1812

Answer:

a. The effective price received by sellers is $0.40 per bottle less than it was before the tax.

Explanation:

When government imposes tax on a product, a seller's margin on such a product falls which the seller tries to recover from the buyer by raising the price of the product.

In the given case, $1 is tax payable to government out of which the seller recovers $0.60 from the buyer via increased price. So, the remaining $0.4 tax is being paid by the seller out of his own pocket.

Effective price received refers to net amount received by the seller after deducting expenses and taxes. So, in the given case, the seller now receives $0.4 less per bottle than the receipts before such tax was imposed.

5 0
3 years ago
The following information is available for Department X for the month of August: Work in process, August 1: Materials $ 8,480 Co
Triss [41]

Answer:

a) $8.00

Explanation:

Beginning work in progress, conversion             $15,900

Conversion costs incurred during period             $26,500

Total costs to account for                                     $42,400

Cost per equivalent unit for conversion = $42,400/5,300

                                                                  = $8.00

Therefore, Department X's cost per equivalent unit for conversion costs using the weighted average method would be $8.00

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3 years ago
Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 19 percent annual interest. The current yield to maturity
Umnica [9.8K]

The question is incomplete as the maturity dates are missing. The complete question is as follows,

Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 19 percent annual interest. The current yield to maturity on such bonds in the market is 11 percent. Compute the price of the bonds for these maturity dates:

a. 40 years  

 b. 17 years

 c. 8 years

(Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

Answer:

a.

Bond Price  = $1716.084065 rounded off to $1716.08

b.

Bond Price  = $1603.90355 rounded off to $1603.90

c.

Bond Price  = $1411.68982 rounded off to $1411.69

Explanation:

To calculate the quote/price of the bond today, which is the present value of the bond, we will use the formula for the price of the bond. As the bond is an annual bond, we will use the annual coupon payment, number of periods and annual YTM. The formula to calculate the price of the bonds today is attached.

<u>a. 40 Years </u>

Coupon Payment (C) = 1000 * 0.19 = $190

Total periods remaining (n) = 40

r or YTM = 0.11 or 11%    

 

Bond Price = 190 * [( 1 - (1+0.11)^-40) / 0.11]  + 1000 / (1+0.11)^40

Bond Price  = $1716.084065 rounded off to $1716.08

<u>b. 17 Years </u>

Coupon Payment (C) = 1000 * 0.19 = $190

Total periods remaining (n) = 17

r or YTM = 0.11 or 11%    

 

Bond Price = 190 * [( 1 - (1+0.11)^-17) / 0.11]  + 1000 / (1+0.11)^17

Bond Price  = $1603.90355 rounded off to $1603.90

<u>c. 8 Years </u>

Coupon Payment (C) = 1000 * 0.19 = $190

Total periods remaining (n) = 8

r or YTM = 0.11 or 11%    

 

Bond Price = 190 * [( 1 - (1+0.11)^-8) / 0.11]  + 1000 / (1+0.11)^8

Bond Price  = $1411.68982 rounded off to $1411.69

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