Answer: a. $4,000
b. $5,000
Explanation:
a. If she can sing at each wedding but decides to maximise profits, she will only sing at the weddings of those paying her $200 as it is the higher of the two payment options.
Should she sing at the $200 customer weddings, she would make;
= 20 people * $200
= $4,000
b. Price Discrimination is the charging of different types of customers different prices for the same or similar goods.
If your friend knows how to perfectly charge the two different groups the different prices that they value her at then she will be able to attend and sing at both weddings making her revenue;
= (10* $100) + (20 * $200)
= 1,000 + 4,000
= $5,000
Answer: Joint by the FED and by the behavior of individuals who hold money and of banks which money is held.
Explanation: The Federal Reserve System, often referred as the Federal reserve or simply "the fed", is the central bank of the united states. It was created by the congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. The FED was created on December 23, 1913, when president Woodrow Wilson signed the FEDERAL RESERVE ACT into law. The Fed and the behavior of individuals not only define how much money are available, they can also define macroeconomic indicators like inflation.
Answer:
a. $7,505
b.$6,840
Explanation:
a. Computation for the after-tax cost of the expense assuming that Firm A incurs the expense
Using this formula
After-tax cost = Deductible Expense - (Firm A Marginal tax rate* Deductible Expense)
Let plug in the formula
After-tax cost = ($9,500 - ($21%*9500)
After-tax cost = ($9,500 - $1,995)
After-tax cost=$7,505
Therefore the after-tax cost of the expense assuming that Firm A incurs the expense is $7,505
B. Computation for the after-tax cost of the expense assuming that Firm Z incurs the expense
Using this formula
After-tax cost = Deductible Expense - (Firm Z Marginal tax rate*Deductible Expense)
Let plug in the formula
After-tax cost =$9,500 -(28%*$9500)
After-tax cost =($9,500 - $2,660 )
After-tax cost=$6,840
Therefore the after-tax cost of the expense assuming that Firm Z incurs the expense is $6,840
Answer:
1a. Payback period = <u>Initial outlay</u>
Annual cost saving
= <u>$484,500</u>
$85,000
= 5.7 years
b. The equipment should not be purchased because it has a longer payback period than the company's required payback period.
2a. $
Annual cost saving 85,000
Less: Depreciation <u>40,375</u>
Annual profit <u>44,625</u>
Simple rate of return = <u>Annual profit</u> x 100
Initial outlay
<u>$44,625</u> x 100
$484,500
= 9.21%
Depreciation = <u>Cost - Residual value</u>
estimated useful life
= <u>$484,500 - 0</u>
12 years
= $40,375 per annum
2b, The equipment should not be purchased because the simple rate of return is lower than the company's required rate of return.
Explanation:
Payback period is the ratio of initial outlay to annual cost saving. It is the period in which the initial outlay is recouped.
Simple rate of return is the ratio of annual profit to initial outlay. It measures the rate of return on capital invested.
Answer: False
Explanation: The marginal social benefit curve defines the benefits society get from the production of an additional unit. It occurs when consumers are the only group deriving benefit from a product and the steepness of the curve shows the increasing or decreasing benefits derived; describes the net social value of any product, activity or service. When the curve is relatively steep but there exists uncertainty about the marginal social benefit curve, a dead weight loss is created which is the same for price and quantity instruments.
