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schepotkina [342]
3 years ago
7

Marginal​ cost-benefit analysis and the goal of the firm Ken​ Allen, capital budgeting analyst for Bally​ Gears, Inc., has been

asked to evaluate a proposal. The manager of the automotive division believes that replacing the robotics used on the heavy truck gear line will produce total benefits of ​$560 comma 000 ​(in today's​ dollars) over the next 5 years. The existing robotics would produce benefits of ​$400 comma 000 ​(also in​ today's dollars) over that same time period. An initial cash investment of $ 220 comma 000 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $ 70 comma 000. Show how Ken will apply marginal​ cost-benefit analysis techniques to determine the​ following: a. The marginal benefits of the proposed new robotics. b. The marginal cost of the proposed new robotics. c. The net benefit of the proposed new robotics. d. What should Ken recommend that the company​ do? Why? e. What factors besides the costs and benefits should be considered before the final decision is​ made?
Business
1 answer:
True [87]3 years ago
5 0

Answer:

1) The marginal​ (added) benefits of the proposed new robotics.

560,000 - 400,000 = 160,000

2) The marginal​ (added) cost of the proposed new robotics.

220,000 - 70,000 = 150,000

3) The net benefit of the proposed new robotics.

160,000 - 150,000 = 10,000

4) What should Ken recommend that the company​ do? Why?

Replace the existing robotics because the net profit is positive

5) What factors besides the costs and benefits should be considered before the final decision is​ made?

A. Whether there will be additional training necessary with the new robotics.

B. Whether even better robotics may be available in a short while.

C. What will be the energy consumption of the new robotics.

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If the federal open market committee decides to increase the money supply, then
OLEGan [10]

Answer:

the Federal Reserve creates dollars and uses them to purchase government bonds from the public.

Explanation:

The money supply is increased by the Federal Reserve Open Market Committee under expansionary monetary policy actions to increase the level of aggregate demand in the market and push the level of output when business activity in the economy is low and the economy is experiencing a recession.

The FOMC creates dollars and uses them to purchase government bonds from the public that injects money in the market by increasing the credit creation capacity of commercial banks. As the money supply increases, the spending capacity of consumers is increased, either by lowering the cost of debt on their credit cards or by increasing employment in the market with increased investments by firms as they borrow with greater zeal when the cost of borrowing is low.  

8 0
3 years ago
What is the advantage to a multi-criteria analysis?
telo118 [61]

Answer:

c. It is easily adaptable to as many suppliers as you need to evaluate

Explanation:

It involves many factor to analyze a decision due to variety of different assessments it has, it can be applicable to many supplier. It is very helpful to decision making because every aspect of each supplier is analyzed and makes a quality decision. Multi criteria analysis assess every supplier on different factors to find the difference between them and make a best decision.

8 0
3 years ago
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PRODUCT POSSIBILITIES QUESTION 20 point
Nina [5.8K]
The answer is all but D. 
the company cannot produce a combination of x,y when the plot is outside the line 
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3 years ago
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Market structures For each of the following scenarios, determine which market model best describes the scenario. Then identify t
pantera1 [17]

Answer:

Please refer explanation

Explanation:

A. Many small shops sell different styles of sweaters. Some stores sell higher-quality and more expensive sweaters then other stores.

1. many

2. differentiated

3. easy

4. price-searcher

Monopolistic competition is whereby there are many firms selling similar products and services but are not perfect substitutes. They may be different in quality, design or style. Barriers to entry are low and any one firm’s decision does not necessary affect all others. These firms tend to have limited price setting powers and they make use of heavy adverting and brand differentiation.

B. Hundreds of high school students who require tutoring in algebra choose among dozens of tutoring companies offering similar services.

1. many

2. standard

3. easy

4. price-taker

Perfect competition is a market structure where there are many firms selling homogenous or commodity products, such as a fruit or vegetable vendor. They do not have the ability to influence the price and they take the price that they receive. There is free flow of information between sellers and buyers regarding the goods sold as well as the prices of goods and services sold. Firms can easily enter and exit the market.

C. Four Internet providers offer similar services to almost everyone in the city. Any new company would have to engage in a price war with the existing companies.

1. few

2. standard

3. challenging

4. oligopoly

Oligopoly is an imperfect market structure with a small number of firms who are impacted by each other’s actions. Oligopolies may collide either explicitly or tacitly in order to restrict output or fix prices and achieve above normal market returns. Government policies and regulations are placed to encourage or discourage oligopolistic behavior and ensure that consumers are not exploited.

D. Only one pharmaceutical company has a government patent to sell an experimental drug.

1. one

2. unique

3. impossible

4. monopoly

A monopoly refers to a single company dominating the market in an industry. It has a proportionately large market share. This can be due to an absence of proper restraints. They have control of the price in the market for that product. There are very large batters to entry and exit, they exploit economies of scale and are able to make abnormal profits in the industry.

4 0
3 years ago
ABC Company just started business in August. They made the following purchases during August: August 01 300 units $1,560 total c
anastassius [24]

Answer:

Inventory= $3,240

Explanation:

Giving the following information:

They made the following purchases during August:

August 01: 300 units $1,560 total cost

August 12: 400 units 2,340 total cost

August 24: 400 units 2,520 total cost (2520/400= $6.3)

August 30: 300 units 1,980 total cost (1980/300= $6.6)

A physical count on August 31 reveals that there are 500 units on hand.

FIFO (first-in, first-out)

Inventory= 300*6.6 + 200*6.3= $3,240

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