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krok68 [10]
3 years ago
6

Mike has a linear production possibilities frontier that shows maximum production of trucks or computers of 10 million each. Deb

ra also has a linear production possibilities curve that shows maximum production of 9 million trucks or 3 million computers.
Based on the graphs, which of the following statements is true?

Debra has an absolute advantage in the production of computers.
Debra has an absolute advantage in the production of trucks.
Debra has an absolute advantage in the production of computers.
Mike has a comparative advantage in the production of computers.
Business
1 answer:
user100 [1]3 years ago
3 0

Answer:

Mike has a comparative advantage in the production of computers.

Explanation:

Mike's opportunity cost of producing trucks instead of computers = 10 / 10 = 1.

Mike's opportunity cost of producing computers instead of trucks is 10 / 10 = 1.

Debra's opportunity cost of producing trucks instead of computers = 3 / 9 = 0.333.

Debra's opportunity cost of producing computers instead of trucks = 9 / 3 = 3.

Mike's opportunity cost of producing computers instead of trucks is 1, while Debra's is 3. Therefore, Mike has a comparative advantage in the production of computers.

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3 years ago
Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division’s retu
almond37 [142]

Answer:

a. Project's net present value is $1,015,163.09

b. Simple rate of return is 15%

c. Yes. The reason is that the project has a positive net present value of $1,015,163.09.

d. No. The reason is that the simple rate of return of 15% obtained in part b is lower the division’s return on investment (ROI), which has been above 20% each of the last three years.

Explanation:

a. Compute the project's net present value.

To compute this, we first calculate the annual cash inflow as follows:

Annual cash inflow = Net operating income + Depreciation = $452,000 +  $828,000 = $1,,280,000

Now, the project's net present value can be calculated using the formula for calculating the present of an ordinary annuity as follows:

PV = P * [{1 - [1 / (1 + r)]^n} / r] …………………………………. (1)

Where;

PV = Present value of the annual cash flow = ?

P = Annual cash inflow = $1,280,000

r = Discount rate = 17%, or 0.17

n = Equipment useful years = 5

Substitute the values into equation (1) to have:

PV = $1,280,000 * [{1 - [1 / (1 + 0.17)]^5} / 0.17]

PV = $4,095,163.09

Project's net present value = PV - Project's initial investment = $4,095,163.09 - $3,080,000 = $1,015,163.09

b. Compute the project's simple rate of return

This can be computed as follows:

Simple rate of return = Net operating income / Initial investment =  $452,000 / $3,080,000 = 0.15, or 15%

c. Would the company want Derrick to pursue this investment opportunity?

Yes. The reason is that the project has a positive net present value of $1,015,163.09.

Note that had it been the net present value of the project was negative, the company would not want to Derrick to pursue this investment opportunity since the decision of the company is based on whether the project's NPV is positive or negative.

d. Would Derrick be inclined to pursue this investment opportunity?

No. The reason is that the simple rate of return of 15% obtained in part b is lower the division’s return on investment (ROI), which has been above 20% each of the last three years.

Pursuing this investment opportunity will therefore reduce the Overall ROI of the division and Derrick will not get annual pay raises if this happens.

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Mary wants to create a brochure for her new canoe rental business. What type of application software should she use?
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Which of these lenders would be least likely to approve a short sale? unset starred question conventional lenders credit unions
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Junior Lenders would be least likely to approve a short sale.

What is a junior interest?

Junior Interest means a performing junior participation interest in a stabilized or transitional senior commercial, multifamily fixed or floating rate mortgage loan secured by a first lien on multifamily and commercial properties or a subordinate portion of a Senior Mortgage Loan evidenced

Is a take out loan the same as junior mortgage?

A junior mortgage is a second mortgage loan that you take out against your home's equity using the property as collateral. A junior mortgage assumes that you already have a mortgage that's also secured by the home. A junior mortgage forms a second lien against the property.

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4 0
2 years ago
Shoreline Insurance deposited $27,000 in an account paying 4 compounded daily on April 2 and deposited an additional $4,200 in t
nydimaria [60]

Answer:

Balance on balance on July 1 is $31490.67

Explanation:

given data

deposited P =  $27,000

time = April 2  to May 12 = 40 days

rate = 4 % = 0.04

solution

we get here first compound amount that is express as

amount = P × (1+\frac{r}{n})^{nt}     ...................1

put her value

amount = 27000 ×  (1+\frac{0.04}{365})^{(365\times \frac{40}{365})}  

amount = $27118.60

and

now we add here $4,200 in $27118.60 that will be

new principal P = $31318.60

and time t = 12 may to July 1 = 50 days

we get here amount that is put value in equation 1 we get

amount = $31318.60 ×  (1+\frac{0.04}{365})^{(365\times \frac{50}{365})}

solve it we get

amount = $31490.67

so that balance on balance on July 1 is $31490.67

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3 years ago
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