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kipiarov [429]
3 years ago
11

Nick is working for an advertising firm making $60,000 per year but considers starting his own advertising company. Nick has det

ermined that to launch the business, he needs to invest $100,000 of his own funds. The annual cost of running the business will include $50,000 for the rent of the office space, $180,000 for employee wages, and $8,000 for materials and utilities. Nick plans to manage the business, which means that he will have to quit his current job. Suppose that the interest rate (or rate of return) on investments in the economy is 6%.
Nick's total implicit cost per year is _____.
Nick's total cost per year is _____.
Business
1 answer:
adoni [48]3 years ago
4 0

Answer:

$66,000

$304,000

Explanation:

The computation is shown below:

Total implicit cost is

= Job left cost + forgone the return on investment

= $60,000 + $100,000 × 6%

= $60,000 + $6,000

= $66,000

And, the total cost is

= explicit cost + implicit cost

= $50,000 + $180,000 + $8,000 + $66,000

= $304,000

We simply applied the above formulas so that the correct values could come

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Which one of the following statements related to risk is correct?
krok68 [10]

Answer:

c. The systematic risk of a portfolio can be effectively lowered by adding T-bills to the portfolio.

Explanation:

If we want to less the systematic risk of the portfolio so we have to add the t-bills so that the systematic risk could be minimized

The other statements that are mentioned are incorrect as for risk these statements are wrong

So only c option would be considered as correct

Hence, the correct option is c.

7 0
3 years ago
An article in the Economist on the Irish economy​ argues, Irish​ progress, both economic and​ fiscal, is typically measured usin
anygoal [31]

Answer:

GDP is the value of the total production of final goods and services produced within a country (in this case Ireland), while Gross National Product (GNP), in this specific case, is the value of the total production of final goods and services produced by residents of the Ireland (individuals or businesses).

Since several corporations have international headquarters in Ireland due to special tax regimes, e.g. Apple, Microsoft, Google, Intel, Pfizer, FB, etc., and many of those corporations manage all their world trade (except local trade in the US) through those offices, they are very large and wealthy.

4 0
3 years ago
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produ
Elan Coil [88]

Answer: Higher; Comparative advantage

Explanation:

A country or a firm has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodities is lower than the other country or firm.

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

Therefore,

United states's Opportunity cost of producing a pair of shoes = \frac{100}{20}

= 5 apples have to be foregone for producing a pair of shoes

Canada's Opportunity cost of producing a pair of shoes = \frac{20}{10}

= 2 apples have to be foregone for producing a pair of shoes

Hence, Canada has a comparative advantage in producing pairs of shoes because Canada's opportunity cost of producing a pair of shoes is lower than United states opportunity cost.

5 0
3 years ago
The projected benefit obligation was $80 million at the beginning of the year. Service cost for the year was $10 million. At the
irinina [24]

Answer:

$87 million

Explanation:

The projected benefit obligation (PBO) is a measurement of the present amount of money needed by a company to cover future pension liabilities. PBO uses how long the employee will work and any increased future obligations to the employee's pension.

Given that:

PBO at the beginning of the year = $80 million

Service cost for the year =  $10 million

Interest =  Discount rate × PBO at beginning of the year = 5% × $80 million = 0.05 × $80 million = $4 million

Actuarial (gain) Loss = Amount paid - Expected money = $5 million - $4 million = $1 million

Benefits paid paid by trustees = $6 million

The total pension expense for the year = PBO at year beginning + Service cost + interest - Actuarial (gain) Loss - benefits = $80 million + $10 million + $4 million - $1 million - $6 million = $87 million

6 0
3 years ago
Why MERCOSUR is trade diversion and what are the impacts of MERCOSUR on firm operations?
poizon [28]

Answer:

MERCOSUR may have made trade more difficult.

Explanation:

It is a trade divergence due to numerous reasons. It influences nations outside the association since they can't offer to those nations as effectively. The idea was to make a worker's union that would enable every nation to get off their feet and strengthen one another. Yet, it winded up harming one another and different nations for the reasons that it made the trade even more difficult than it was before. So, the impacts of MERCOSUR on firms operation are negative; it made trade more difficult, especially with other countries.

5 0
3 years ago
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