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Yuliya22 [10]
3 years ago
7

Two firms, A and B, each currently dump 50 tons of chemicals into the local river. The government has decided to reduce the poll

ution and from now on will require a pollution permit for each ton of pollution dumped into the river. The government will sell 40 pollution permits for $75 each. It costs Firm A $100 for each ton of pollution that it eliminates before it reaches the river, and it costs Firm B $50 for each ton of pollution that it eliminates before it reaches the river. Neither firm produces any less output, but they both conform to the law. It is likely that between the cost of permits and the cost of additional pollution abatement, a. Firm B will spend $3,000. b. Firm B will spend $3,500. c. Firm A will spend $4,500. d. Firm A will spend $4,000.
Business
2 answers:
Genrish500 [490]3 years ago
7 0

Answer: Firm A will spend $4,000.

Explanation: Daily chemical dumps into the river firm A & B = 50ton.

i. Firm B clean-up cost before it gets the the river = $50/ton.

= $50 x 50tons = $2500.

ii. Government polution rate $75/ton

= $75 x 40(permits) = $3000

Firm B clean-up is less than the cost of pollution permits with $500. Cleaning up it's pollution would be best since it's the cheaper alternative..

Firm A cleanup cost per ton ($100/ton).

= $100 x 50tons = $5000

ii. Government polution rate $75/ton

= $75 x 40(permits) = $3000.

Firm A clean-up is greater than the cost of pollution permits with $2000. Cleaning up it's pollution would cost more. So purchasing of permits would be best.

iii. Purchasing 40 pollution permits

= $100 x 40

= $4000.

vitfil [10]3 years ago
4 0

Answer:

d. Firm A will spend $4,000.

Explanation:

Since Firm B cost of Cleanup before it gets the the river is less than the cost of pollution permits, it will choose to clean up its pollution.

However, since Firm A cleanup cost per ton ($100) is greater than the cost of the pollution permit, it will choose to buy permits.

Maximum Allowable Number of Permits=40

Therefore, Firm A will clean up 10 Tons and dump 40 Tons of Waste.

Cost =(10 Tons *$100)+(40 Tons * $75)

=$(1000+3000)

=$4000.

Firm A will spend $4000.

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Answer:

The effective rate of protection for the U.S. steel industry is approximately 17.5%

Explanation:

Mathematically, the effective rate of protection is calculated as follows;

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Mathematically;

a = value of iron ore/value of steel = 100,00/500,000 = 1/5 = 0.2

From the question, we can see that nominal tariff rate for steel n = 15% = 15/100 = 0.15

The nominal rate for iron ore b = 5% = 5/100 = 0.05

So we substitute all of these into the equation of e above

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3 0
3 years ago
Tyson (48 years old) owns a traditional IRA with a current balance of $50,000. The balance consists of $30,000 of deductible con
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Answer:

$12,500 income tax; $1,250 penalty

Explanation:

The distribution from the traditional IRA is fully taxable since he Tyson receives a distribution of the entire $50,000 balance of his traditional IRA

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8 0
4 years ago
Is a plan of action to achieve a particular set of objectives?
vitfil [10]
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4 0
4 years ago
You are attempting to value a call option with an exercise price of $100 and one year to expiration. The underlying stock pays n
Anastasy [175]

Answer:

$13.64

Explanation:

Given:

Exercise price,X = $100

Current price = $100

Value when price is up, uS = $120

Value when price is down, dS= $80

Risk free interest rate = 10%

First calculate hedge ratio, H:

H = \frac{C_u - C_d}{uS - dS}

Where,

Cu = uS - X

= 120 - 100

= $20

H = \frac{20 - 0}{120 - 80} = \ftac{1}{2}

A risk free portfolio involves one share and two call options.

Find cost of portfolio:

Cost of portfolio = Cost of stock - Cost of the two cells.

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This portfolio is risk free. The table below shows that

_______________

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____________________

Portforlio 2:

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Present value = \frac{80}{1 + 0.10} = 72.73

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$72.73 = $100 - 2C

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C = \frac{100 - 72.73}{2} = 13.64

Call option's value = $13.64

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A job shadow is usually very short term and involves following someone around to observe their work. An internship is usually a month or longer and is more formalized.
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