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Shtirlitz [24]
3 years ago
8

Your insurance firm processes claims through its two facilities: facility A and facility B. Each month, facility A handles 6,000

claims and incurs in $50,000 fixed costs and $54,000 in variable costs. Each month, facility B handles 5,000 and incurs $174,000 in fixed costs and $60,000 in variable costs. IF you anticipate a decrease in the number of claims, where will you lay off workers?
Business
1 answer:
Leokris [45]3 years ago
7 0

Answer:

The Facility B will lay off the workers.

Explanation:

For taking any decision, first we have to compute the variable cost per claim and fixed cost per claim

The variable cost per claim is equals to

= Total variable cost ÷ number of claims

For Facility A, the variable cost is equals to

= $54,000 ÷ 6,000 = $9 per claim

For Facility B, the variable cost is equals to

= $60,000 ÷ 5000 = $12 per claim

As fixed cost is remain same, so we don't have to compute the fixed cost because it is given in the question.

Since, in Facility B, the variable cost is $12 per claim and in Facility A, the variable cost is $9 per claim. So, the  Facility B has greater variable cost per claim than Facility A, so the Facility B will lay off the workers if decrease in the number of claims happen.

Hence, Facility B will lay off the workers.

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A project will produce an operating cash flow of $136,000 a year for three years. The initial cash outlay for equipment will be
pashok25 [27]

Answer:

     NPV  =$ 60,311.80

Explanation:

<em>The net present value (NPV) of a project is the present value of cash inflow  less the present value of cash outflow of the project.</em>

NPV = PV of cash inflow - PV of cash outflow

We can set out the cash flows of the project using the table below:

                                                  0                  1                   2                 3          

Operating cash flow                                136,000     136,000    136,000

Initial cost                              (274,000)

Working capital                     (61,000 )                                          61,000

Salvage value                        <u>               </u>    <u>             </u>      <u>           </u>      1<u>5000  </u>              

Net cashflow                     <u> (335,000)  136,000      136,000      212,000.</u>

PV  inflow= (136000)× (1.1)^(-1) + (136,000× (1.1)^(-2) + (112,000)× (1.1)^(-3)

       =  395,311.80

NPV =395,311.80 -335,000

       =$ 60,311.80

3 0
3 years ago
Businesses often spend significantly more money on creating customer access for their products/service than they spend on advert
Ksivusya [100]

Answer:

The correct answer is:

True (A)

Explanation:

Customer access strategy is a framework or a set of standards, guidelines and processes, which defines the means by which a customer and the organization can interact, and  means by which the customer has access to:

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The arear of access are mainly information (value of the product, price of products, how products work) and logistics (means of getting the products, customer service on the after-purchase needs etc).

It has been studied extensively that companies are spending 3 to 4 times as much money on creating customer access than they do on advertising, this is because even if advertising is successful, the results will not be seen if customer access is not successful, and having an efficient customer access strategy can provide a competitive advantage to the producers.

5 0
3 years ago
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nikklg [1K]

Answer:

Check the explanation

Explanation:

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Step 1: Setup a spreadsheet on Excel, as shown in the first and second attached images below:

Note: The values of quantities of the three items is kept as 1 to for the calculations of total cost.

The Solver dialogue box will appear. Enter the decision variables, objective function and the constraints, as shown in the third attached image below:

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melamori03 [73]
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inn [45]
Investors would be the answer 
8 0
3 years ago
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