1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lady bird [3.3K]
3 years ago
6

The Missing Link Chain-Link Fence Company is trying to determine how many chain-link fabricating machines to buy for its factory

. If we define a chainlink fence of some specified length to be equal to one unit of output, the price of a new fabricating machine is 60 units of output, and the price of a one-year-old machine is 51 units of output. These relative prices are expected to be the same in the future. The expected future marginal product of fabricating machines, measured in units of output, is 165-2K, where K is the number of machines in use. There are no taxed of any sort. The real interest rate is 10% per year.
(a) What is the user cost of capital? Specify the units in which your answer is measured.
(b) Determine the number of machines that will allow Missing Link to maximize its profit.
(c) Suppose that Missing Link must pay a tax equal to 40% of its gross revenue. What is the optimal number of machines for the company?
Business
1 answer:
OleMash [197]3 years ago
4 0

Answer:

Explanation:

What is given:

The price of a new fabricating machine - 60

The price of a one-year-old machine - 51

The real interest rate is 10% per year

Marginal product of fabricating machines 165-2K (K - desired number machines)

If calculate the depreciation, (60-51)/51 = 15%

a) Find user cost of capital

User cost of capital is the sum of interest rate and depreciation cost multiplied by the price of new machine

= 60*(0.10+0.15) = 15 units

b) Determine the number of machines that will allow Missing Link to maximize its profit

165-2K=15

2K = 150

K = 75 machines

c)

Suppose that Missing Link must pay a tax equal to 40% of its gross revenue. What is the optimal number of machines for the company?

165-2K = 15/(1-0.4)

165-2K=14/0.6

165-2K=25

2K=140

K=70 macines

You might be interested in
Before Sandra opened her florist shop she read all she could about the floral industry. She also consulted several published res
Rom4ik [11]

Answer: Secondary data

       

Explanation: In simple words, the data that is collected by someone and is used by someone else is called secondary data. Government reports and surveys by other such organisation are two of the many examples of secondary data.

In the given case, Sandra collected information for her future business from the published research reports. She did not collected data from a census conducted by herself.

Hence, from the above we can conclude that the correct option is B.

5 0
3 years ago
he following labor standards have been established for a particular product: Standard labor-hours per unit of output 9.0 hours S
Arisa [49]

Answer:

Direct labor rate variance= $2,430 favorable.

Explanation:

Giving the following information:

Standard labor rate $ 15.10 per hour

Actual hours worked 8,100 hours

Actual total labor cost $ 119,880

To calculate the direct labor rate variance, we need to use the following formula:

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Actual rate= 119,880/8,100= $14.8

Direct labor rate variance= (15.1 - 14.8)*8,100= $2,430 favorable.

<u>It is favorable because the actual rate for direct labor was lower than the estimated rate.</u>

4 0
3 years ago
The business cycle is: a. the pattern of increases and decreases in the money supply. b. the term used to describe fluctuations
leonid [27]

Answer:

The correct answer is option b.

Explanation:

The business cycle can be defined as the fluctuations in the level of output of goods and services produced in an economy in a year. It is also referred to as the trade cycle.  

The business cycle consists of several stages such as recession, depression, expansion, boom or peak, recovery, etc.

The output level tends to fluctuate around its long term trend.

8 0
3 years ago
New Products pays no dividend at the present time. Starting in Year 3, the firm will pay a dividend of $.25 per share for two ye
maksim [4K]

Answer:

$3.56

Explanation:

Please see attachment .

8 0
3 years ago
Sales $ 79,000 $ 65,000 $ 61,000 $ 57,000 $ 50,000 Cost of goods sold 75,900 50,100 49,800 40,200 30,000 Dollar amounts stated a
Natalija [7]

Answer:

This is a two part question and the answer is given in two separate headings.

Explanation:

<u>Trend Percentages</u>

Year                             2021      2020     2019     2018

Sales*                            58%       30%       22%       14%

Cost of Goods Sold**   153%      67%        66%      34%

*Sales is calculated by dividing the difference (between current Sales and Base Sales Year) by the Base Sale Year 2017 * 100. Example for 2018 the percentage is 14% [(57,000 - 50,000) / 50,000 * 100]. The same way other years have been calculated.

**Cost of Goods Sold has been calculated by dividing the difference (between current Cost of Goods Sold and Base Year Cost of Goods Sold) by the Base Year Cost of Goods Sold 2017 * 100. Example for 2018 the percentage is 14% [(40,200 - 30,000) / 30,000 * 100]. The same way other years have been calculated.

<u>Trends Favourable or Unfavourable</u>

It is noted that the trend is unfavourable for the five-year period. This is because the sales have been increasing but in comparison to the Cost of Goods Sold the rise is fairly slow. As shown in the above table where sales have increased by only 58% since its inception. However, the Cost of Goods Sold has increased rapidly and by the last trending year the rise in comparison to the base year 2017 was by 153%.

8 0
3 years ago
Other questions:
  • Assume that a consumer has a given budget or income of $12 and that she can buy only two goods, apples or bananas. The price of
    9·1 answer
  • When a contract is deemed against generally accepted public policy, the courts will determine the agreement to be _____?
    13·1 answer
  • Long-term creditors are usually most interested in evaluating __________
    11·1 answer
  • In monopolistically competitive markets, resources are: Group of answer choices overallocated because long-run equilibrium occur
    10·1 answer
  • On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred a
    12·1 answer
  • In a process called __________, a customer visits a store to touch, feel, and even discuss a product's features with a sales ass
    7·1 answer
  • If an investment of $35,000 is earning an interest rate of 8.00%, compounded annually, then it will take for this investment to
    14·1 answer
  • You just signed a business consulting contract with one of your clients. The client will pay you $50,000 a year for five years f
    14·1 answer
  • You own a $36,800 portfolio that is invested in Stocks A and B. The portfolio beta is equal to the market beta. Stock A has an e
    13·1 answer
  • Joe is one of the lead accountants for his company. Last month he was pressured to prepare the financial reports more quickly th
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!