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zimovet [89]
3 years ago
8

Steven's Auto is trying to decide whether to lease or buy some new equipment costing $23,000 that has a life of three years, aft

er which it will be worthless. The aftertax discount rate is 5.8 percent. Assume the annual depreciation tax shield is $1,610 and the aftertax annual lease payment is $6,500. What is the net advantage to leasing?
Business
1 answer:
jolli1 [7]3 years ago
7 0

Answer:

$1,241

Explanation:

For computing the net advantage to leasing first we have to determine the total cash flow from leasing and total cash flow from buying which is shown below:

For leasing:

Year       Lease payment      PVF at 5.8%    Present value

1              $6,500                   0.9452             $6,144

2             $6,500                   0.8934             $5,807

3              $6,500                  0.8444              $5,489

Total outflow                                                   $17,440

For buy:

Year      Outflow or inflow     PVF at 5.8%    Present value

0            ($23,000)                    1                      ($23,000)

1              $1,610                       0.9452             $1,522

2             $1,610                        0.8934             $1,438

3              $1,610                       0.8444              $1,359

Total outflow                                                   $18,681

Now the net advantage to leasing is

= Buy outflow - leasing outflow

= $18,681 - $17,440

= $1,241

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Suppose that the market demand curve for bean sprouts is given by P = 1,660 - 4Q, where P is the price and Q is total industry o
a_sh-v [17]

Answer:

In equilibrium, total output by the two firms will be option e= 300.  

Q = q_{1} + q_{2}

Q = 100 + 200

Q = 300

Explanation:

Data Given:

Market Demand Curve = P = 1660-4Q

where, P = price and Q = total industry output

Each firm's marginal cost = $60 per unit of output

So, we know that Q =  q_{1} + q_{2}

where q_{} being the individual firm output.

Solution:

P = 1660-4Q

P = 1660- 4(q_{1} + q_{2})

P = 1660 - 4q_{1} - 4q_{2}

Including the marginal cost of firm 1 and multiplying the whole equation by q_{1}

Let's suppose new equation is X

X =  1660q_{1} - 4q_{1} ^{2} - 4q_{1}q_{2} - 60q_{1}

Taking the derivative w.r.t to q_{1}, we will get:

X^{'} = 1660 - 8q_{1} - 4q_{2} - 60 = 0

Making rearrangements into the equation:

8q_{1} + q_{2} = 1660 - 60

8q_{1} + q_{2} = 1600

Dividing the whole equation by 4

2q_{1} +q_{2} = 400

Solving for q_{1}

2q_{1} = 400 - q_{2}

q_{1} = 200 - 0.5 q_{2}  

Including the marginal cost of firm 1 and multiplying the whole equation by q_{2}

P = 1660 - 4q_{1} - 4q_{2}

Let's suppose new equation is Y

Y =  1660q_{2} - 4q_{1}q_{2} -4q_{2} ^{2} - 60q_{2}

Pugging in the value of q_{1}

Y =  1660q_{2} - 4q_{2}(200 - 0.5 q_{2}) -4q_{2} ^{2} - 60q_{2}

Y =  1660q_{2} - 800q_{2} +2q_{2} ^{2} -4q_{2} ^{2} - 60q_{2}

Y =  1600q_{2} - 800q_{2} -2q_{2} ^{2}

Taking the derivative w.r.t q_{2}

Y^{'} = 1600 - 800 - 4q_{2} = 0

Solving for q_{2}

4q_{2} = 800

q_{2} = 200

q_{1} = 200 - 0.5 q_{2}

Plugging in the value of q_{2} to get the value of q_{1}

q_{1} = 200 - 0.5 (200)

q_{1} = 200 - 100

q_{1} = 100

Q = q_{1} + q_{2}

Q = 100 + 200

Q = 300

Hence, in equilibrium, total output by the two firms will be option

e= 300.

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3 years ago
When it comes to investing, what is the typical relationship between risk and return?
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D i would think im not shure thoe
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In the small country of Economerica, there are 6 thousand people employed, 1 thousand people unemployed, and 3 thousand people o
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Answer: B. 20.00%

Explanation:

Unemployment rate does not include those who have given up on finding a job.

Unemployment rate = Unemployed people / Labor force

Unemployed people:

= Original unemployed + half the new graduates

= 1,000 + (1,000 / 2)

= 1,500 people

Labor force:

= Unemployed + employed people

= 1,500 + 6,000

= 7,500 people

Unemployment rate:

= 1,500 / 7,500

= 20%

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In chicago's southside (and other places), auto mechanics (who work outside the formal sector, without a business license, adver
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Woodland industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based cost
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Answer:

Explanation:

a.

Direct materials 101,500

Direct labour (13,600 * 13) 176, 800

Materials handling (508 * 0.28) 142.24

Cutting and lathe work (508 * 12.32) 6258.56

Assembly and inspection (13,600 * 17.5) 238,000

Total manufacturing cost 522,700.8

Cost per unit produced = 522,700.8 / 3,050 =  

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b.

Predetermined overhead rate = Estimated overhead costs / Estimated Direct labour hours

(61,600 + 2,710,400 + 3,850,000) / 220,000

= 30.1 per direct labour hour

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Direct labour (13,600 * 13) 176,800

Manufacturing overhead (13,600 * 30.1) 409,360

Total manufacturing cost 687,660

Cost per unit produced = 687,660/ 3,050

= 225.46 per unit.

3 0
3 years ago
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