1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
OlgaM077 [116]
3 years ago
5

A small market orders copies of a certain magazine for its magazine rack each week. Let X 5 demand for the magazine, with pmf Su

ppose the store owner actually pays $2.00 for each copy of the magazine and the price to customers is $4.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine? [Hint: For both three and four copies ordered, express net revenue as a function of demand X, and then compute the expected revenue.]
Business
1 answer:
Oksanka [162]3 years ago
5 0

Answer:

See explanation below.

Explanation:

Let X the random variable that represent the demand for the magazine, the pmf for X is given by:

X       1            2           3          4        5        6      

P(X)  1/15      2/15       3/15     4/15   3/15     2/15

3 magazines

For this case the total spent is 2*3 = $ 6

And the net revenue for this case would be:

$4-$6 = -$2 , X=1 (demand 1)

$4*2-$6 = $2 , X=2 (demand 2)

$4*3-$6 = $6 , X=3 (demand 3)

For the values of X=4,5,6 the net revenue will be $6 since the number of magazines is 3

And the expected value for the net revenue would be:

E(R) = \frac{1}{15} *(-2) +\frac{2}{15} *(2) +\frac{3}{15}*(6) + \frac{4}{15}*(6) +\frac{3}{15}*(6) +\frac{2}{15}*(6) = \frac{74}{15}=4.93

4 magazines

For this case the total spent is 2*4 = $ 8

And the net revenue for this case would be:

$4-$8 = -$4 , X=1 (demand 1)

$4*2-$8 = $0 , X=2 (demand 2)

$4*3-$8 = $4 , X=3 (demand 3)

$4*4-$8 = $8 , X=4 (demand 4)

For the values of X=5,6 the net revenue will be $8 since the number of magazines is 4

And the expected value for the net revenue would be:

E(R) = \frac{1}{15} *(-4) +\frac{2}{15} *(0) +\frac{3}{15}*(4) + \frac{4}{15}*(8) +\frac{3}{15}*(8) +\frac{2}{15}*(8) = \frac{80}{15}=5.33

As as we can see we have a higher expected value for the case with 4 magazines.

You might be interested in
Last year Harrington Inc. had sales of $325,000 and a net income of $19,000, and its year-end assets were $250,000. The firm's t
anzhelika [568]

Answer:

8.94%

Explanation:

Firstly, we will need to find total equity and total debt of Harrington Inc inorder to apply the Dupont equation for getting ROE

Harrington's total debt = 15.00 % × $250,000

= $37,500

Harrington's total equity will be; applying accounting equation

Asset = Liabilities + Owner's equity

Owner's equity = Assets - Liabilities

= $250,000 - $37,500

= $212,500

Therefore, using the Dupont equation, we can calculate the ROE as;

(NI/Sales) × (Sales/Total assets) × (Total assets/Total common equity)

= 19,000/325,000 × 325,000 /250,000 × 250,000/212,500

= 8.94%

7 0
3 years ago
An important difference between accounting and other 4 functions, such as marketing and management, is that
Stolb23 [73]
Well, since there's no options

Accounting : providing information regarding all financial aspects in the company

Marketing : determining kinds strategies to introduce  company's products to the market

Management : Organizing all part of the company in order to reach company's goal
3 0
3 years ago
Using the most reliable information available, how much of the Earth's land surface is used for agriculture today? View Availabl
enot [183]

Answer:

The answer is: 30 to 40%, according to satellite imagery

Explanation:

Satellite imagery is the most reliable way to try to determine what percentage of the Earth's land is used for agriculture. First and most important, the world is huge and only satellites have the technology to take images of continents and differentiate what possible use is given to them.

Government's surveys and records are no very reliable since you would need to use information from all the governments in the world including democratic countries and nations with dictatorships.

4 0
3 years ago
Match the items below by entering the appropriate code letter in the space provided. Plant assets Book value Salvage value Strai
disa [49]

Answer:

1. Small expenditures which primarily benefit the current period. REVENUE EXPENDITURES

2. Cost less accumulated depreciation. BOOK VALUE

3. An accelerated depreciation method used for financial statement purposes. DOUBLE DECLINING BALANCE METHOD

4. Tangible resources that are used in operations and are not intended for resale. PLANT ASSETS

5. Equal amount of depreciation each period. STRAIGHT LINE METHOD

6. Expected cash value of the asset at the end of its useful life. SALVAGE VALUE

7. Process of allocating the cost of equipment over its service life. DEPRECIATION

8. Material expenditures that increase an asset's operating efficiency, productive capacity, or useful life CAPITAL EXPENDITURES

9. An accelerated depreciation method used for tax purposes. MACRS

10. Useful life is expressed in terms of units of production or expected use. UNITS OF ACTIVITY METHOD

Explanation:

7 0
3 years ago
Your grandmother recently surprised you and gave you $15,000 expressly for the purpose of starting your retirement savings. Her
qaws [65]

Answer:

A. $115,291.30

B. $421,536.55

C. $1,471,502.67

Explanation:

The expression that describes the final amount of a $15,000 investment compounded annually for 35 years is:

A = \$15,000*(1+i)^{35}

A. 6% per year

i = 0.06

A = \$15,000*(1+0.06)^{35}\\A = \$115,291.30

B. 10% per year

i = 0.10

A = \$15,000*(1+0.10)^{35}\\A = \$421,536.55

C. 14% per year

i = 0.14

A = \$15,000*(1+0.14)^{35}\\A = \$1,471,502.67

3 0
3 years ago
Other questions:
  • Connolly Company produces two types of lamps, classic and fancy, with unit contribution margins of $13 and $21, respectively. Ea
    5·1 answer
  • Netpass company has 600,000 shares of common stock authorized, 510,000 shares issued, and 240,000 shares of treasury stock. the
    15·1 answer
  • Diverse Diversions, Inc., makes video, games. Ember buys a copy of Final Infinity. Inside the package is a shrink-wrap agreement
    9·1 answer
  • Which of the following conditions might result in the best financial decisions?
    9·2 answers
  • What is the maximum fine that the Real Estate Commission can impose for a violation of commission rules?
    12·1 answer
  • ABC Company produces Product X, Product Y, and Product Z. All three products require processing on specialized finishing machine
    12·1 answer
  • Which of the following is not an advantage of participative budgeting? a.It encourages budgetary slack. b.It tends to lead to a
    7·1 answer
  • What does the Judge usually say when things get crazy in the court room?
    9·2 answers
  • What are some Financial sources that are NOT reliable! plz help i will give 19 to the brainilest
    15·2 answers
  • Abc buys widgets for $5 cash and sells them on account for $8. At the point of sale, what is the effect on the cash flow of abc?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!