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alexandr1967 [171]
3 years ago
10

Many mining and mineral extraction processes tend to exhibit increasing returns to scale. Suppose copper mines have increasing r

eturns, and the existing copper mines reduce their capital and labor inputs by 25 percent in response to a global recession. What is the expected impact on copper output
Business
1 answer:
IrinaK [193]3 years ago
6 0

Answer: D) Output decreases by more than 25 percent

Explanation:

When a firm is said to be experiencing Increasing Returns to Scale, it means that for every additional unit of a factor of production, the firm experiences a higher increase in production than the additional unit. For example, if a Firm's output increases by 1.5 every time they hire an extra worker, the firm is said to be going through Increasing Returns to Scale.

With that same logic, if factors of production were reduced, the company undergoes a reduction in output that is bigger than the reduction in the factor of production.

For this reason, option D is correct in saying that Output decreases by more than 25 percent.

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Omaha Plating Corporation is considering purchasing a machine for $1,500,000. The machine is expected to generate a constant aft
RoseWind [281]

Answer:

The payback period for the new machine is 6 years.

Explanation:

depreciation = $1,500,000/10

                     = $150,000

payback period = ($100,000 + $150,000)/$1,500,000

                           = 6 years

Therefore, The payback period for the new machine is 6 years.

5 0
3 years ago
In 2019, BayKing Company sold used equipment for $17,000. The equipment had an original cost of $80,000 and accumulated deprecia
miv72 [106K]

Answer:

$73,000

Explanation:

Equipment net book value (NBV) = $80,000 - $60,000 = $20,000

Loss on sale of equipment = NBV - Sales proceed = $20,000 - $17,000 = $3,000

Net operating cash flows for 2019 = Net income - Loss on sale of equipment = $76,000 - $3,000 = $73,000

7 0
3 years ago
You are considering two independent projects. Project A has an initial cost of $125,000 and cash inflows of $46,000, $79,000, an
Harrizon [31]

Answer:

b. Accept Project A and reject Project B.

Explanation:

To verify project viability at a required return rate of 16%, simply calculate the project's net present value at a rate of 16%. If the NPV is positive, then the project should be accepted, otherwise it should be rejected.

Project A:

NPV = -\$125,000 +\frac{\$46,000}{(1+0.16)} +\frac{\$79,000}{(1+0.16)^2} +\frac{\$51,000}{(1+0.16)^3}\\NPV =\$6,038.58

Project A should be accepted.

Project B:

NPV = -\$135,000 +\frac{\$50,000}{(1+0.16)} +\frac{\$30,000}{(1+0.16)^2} +\frac{\$100,000}{(1+0.16)^3}\\NPV =-\$5,535.89

Project B should be rejected.

6 0
3 years ago
Adding Erik Olin Wright’s concept of contradictory class locations to the Marxist concept of capitalists versus the proletariat,
bija089 [108]

Answer:

a salaried paralegal assistant at a law firm

  • <em>Correct label: proletariat the head of printing press operations at a major newspaper </em>
  • <em>Correct label: contradictory the owner of a large franchised restaurant </em>
  • <em>Correct label: capitalist a freelance graphic artist </em>
  • <em>Correct label: contradictory</em>
4 0
3 years ago
The cellular phone division of Stegall Company had budgeted sales of $950,000 and actual sales of $900,000. Budgeted expenses we
WINSTONCH [101]

Answer:

Since the actual expenses is lower than the budgeted expenses, and the variance is positive, a report prepared for the manager of this profit center would show a favorable variance.

Explanation:

Revenue variance is the difference between the actual sales volume and the budgeted sales volume.

Revenue variance = Actual sales - Budgeted sales

Budgeted sales = $950000

Actual sales = $900000

Revenue variance = $900000 - $950000

                               = - $50000

Since the actual sales is lower than the budgeted sales, and the variance is negative, so the variance is unfavorable.  

Cost variance is the difference between the budgeted expenses and the actual expenses.

Cost variance = Budgeted expenses - Actual expenses

Budgeted expenses = $600000

Actual expenses = $550000

Cost variance = $600000 - $550000

                       = $50000

Since the actual expenses is lower than the budgeted expenses, and the variance is positive, so the variance is favorable.

Therefore, Since the actual expenses is lower than the budgeted expenses, and the variance is positive, a report prepared for the manager of this profit center would show a favorable variance.

8 0
3 years ago
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