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Evgesh-ka [11]
3 years ago
12

7. Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to r

equire a permit for each ton of manure applied. The government gives each farmer 50 permits. Farmer A incurs losses of $25 for each ton of manure he does not apply, and Farmer B incurs losses of $50 for each ton of manure he does not apply. What is the total cost of reducing runoff if firms are not allowed to buy and sell permits from each other? What is the total cost of reducing runoff if the firms are allowed to buy and sell permits from each other?
Business
1 answer:
valentinak56 [21]3 years ago
8 0

Answer:

Explanation:

1) The total cost of reducing runoff if the farmers are not allowed to trade permits is:

total loss = farmer A' loss + farmer B's loss

where:

  • farmer A's loss = (100 - 50) x $25 = $1,250
  • farmer B's loss = (100 - 50) x $50 = $2,500

total loss = $1,250 + $2,500 = $3,750

2) The total cost of reducing runoff if the farmers are allowed to trade permits is:

Since farmer A will be willing to sell his permits to farmer B for a price that is ≥ $25 and ≤ $50, the total cost of reducing runoff is $2,500.

If farmer A sells his runoff permit at a price higher than $25 his costs will decrease but farmer B's costs will increase, so any gain due to price change is offset by the other farmer's loss.  

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Elan Coil [88]

Answer:

Explanation:

No matter what the future holds, an economics major helps people succeed. Understanding how decisions are made, how markets work, how rules affect outcomes, and how economic forces drive social systems will equip people to make better decisions and solve more problems. This translates to success in work and in life.

3 0
3 years ago
Anderson Products Inc., a large conglomerate, took over a small startup company that had made some breakthrough innovations in t
Whitepunk [10]

Answer: Acquisition

Explanation:

 The Acquisition is one of the type of method that helps in acquiring the various types of business strategies for manage the business for achieving the given target.

 The main objective of the acquisition in the business is that it helps in achieving the desirable goal and helps in finding the various types of strengthening characteristics of the firm.

According to the given scenario, the Andersen products Inc, is one of the small startup based company and they gaining the access for managing the organization technology and also the human capital.

Therefore, This transactional process is refers as the acquisition method.  

4 0
3 years ago
The Harleysville Manufacturing Shop produces motorcycle parts. Typically, 10 pieces out of a job lot of 1,000 parts are spoiled.
Murrr4er [49]

Answer:

B

Materials Control $ 250

Manufacturing Overhead Control $1,000

              Work-in-Process Control $1,250

Explanation:

spoilage rate: 10/1000 = 0.01=1%

the job requires 2,500 goods parts

total part required (considering spoilage)

\frac{requirement}{1-spolage} =$total needs

2,500 /(1-0.01) = 2500/ 0.99 = 2525.2525 = 2525

2525-2500 = 25 spoilage part

<u>Note:</u>

in this case you may think you can simple do 2,500 x 0.01

But if the spoilage rate is high or the amount of high is, then you will have an answer different than the correct method. Stick to the formula given.

25 part x 50 = 1,250

From the work in process, we will subtract this value, we will increase the spoilage materials inventory and charge the diference as actual overhead.

b.

Materials Control $ 250

Manufacturing Overhead Control $1,000

              Work-in-Process Control $1,250

4 0
3 years ago
One perspective describes ________ as an integrative management field that combines analysis, formulation, and implementation in
VikaD [51]

Answer: strategic management

Explanation:

Strategic management is integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage.

Strategic management simply had to do with the evaluation of business goals, vision of an organisation and objectives. For organizational goals to be achieved, effective strategies must be put in place.

6 0
2 years ago
As a financial manager for WillPower, Inc, you have the following information: a) The company follows a residual dividend policy
8_murik_8 [283]

Answer:

a. Amount funded with equity is $4,800,000

b. Dividend is $3,200,000

c. Dividend Payout ratio is 40.00%

Explanation:

Note: This question is incomplete, and the complete one is as follows:

As a financial manager for WillPower, Inc, you have the following information: a) The company follows a residual dividend policy; b) The total capital budget for next year is likely to be $8,000,000; c) The forecasted level of earnings next year is $8,000,000; d) The target or optimal capital structure is a debt ratio of 40%;

Please answer the following questions:

a. What will be the amount funded with equity for the project ? (Keep the answer to a whole number. Example of answer format: $1,000,000)

b. Compute the amount of the dividend . (Keep the answer to a whole number. Example of answer format: $1,000,000)

c. Compute the dividend pay-out ratio . (Keep the answer to two decimals. Example of the answer format: 55.55%)

The following are therefore the explanation of the answers to the question:

a. What will be the amount funded with equity for the project ? (Keep the answer to a whole number. Example of answer format: $1,000,000)

Given that the target or optimal capital structure is a debt ratio of 40%, this implies that there will be 40% debt finance and 60% (100% - 40%) equity finance. Therefore, we have:

Amount funded with equity = Total capital budget for next year * Percentage of equity finance = 8,000,000 * 60% = $4,800,000

b. Compute the amount of the dividend. (Keep the answer to a whole number. Example of answer format: $1,000,000)

Since the company follows a residual dividend policy, it implies that the earnings available are employed to finance capital expenditure budget first before dividends are paid to the shareholders.

Since amount funded with equity is $4,800,000 as obtained in part a, it implies that this must be deducted first from the forecasted level of earnings next year to obtain the residual that will be paid as dividend as follows:

Dividend = Forecasted level of earnings next year - Amount funded with equity = $8,000,000 - $4,800,000 = $3,200,000

c. Compute the dividend pay-out ratio . (Keep the answer to two decimals. Example of the answer format: 55.55%)

Dividend payout ratio refers to the percentage of the earnings or net income of a company that is paid by the company to its shareholders as dividend. This can therefore be calculated

Dividend Payout ratio = Dividend / Earnings = $3,200,000 / $8,000,000 = 0.40, or 40.00%

Therefore, WillPower, Inc is expected to pay 40% of its earnings as dividend to its shareholders.

4 0
2 years ago
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