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gladu [14]
4 years ago
5

Joe decided to quit his computer-programming job (where he was earning $48,000 per year) to start his own software business. For

his office, Joe will use a two-story building that he bought 7 years ago for $250,000. The building is located in Hyde Park (South side of Chicago) in an area where a lot of recent construction has taken place, so the market price for the land has increased. You are given the following information about the costs of his firm:
Joe will pay himself a wage of: $18,000 per year
Maintenance and insurance $30,240 per year
Revenue $96,000 per year
Land’s salvage (resale) value $395,000
Risk-free interest rate 4.75% annually

Assume for simplicity that all taxes are equal to zero. Calculate the economic annual profits of this firm:_______

a. 47,760
b. −1,002.5
c. 47,741.2
d. 14,843.3
e. None of the above.
Business
1 answer:
Mrrafil [7]4 years ago
7 0

Answer:

b. −1,002.5

Explanation:

economic profit = accounting profit - opportunity costs

  • accounting profit = revenue - maintenance and insurance = $96,000 - $30,240 = $65,760
  • opportunity costs = the lost salary as a computer programmer + money he could earn by selling the land lot and investing = $48,000 + ($395,000 x 4.75%) = $66,762.50

economic annual profit = $65,760 - $66,762.50 = -$1,002.50

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The following amounts were taken from the financial statements of Plant Company: 2012 2011 Total assets $800,000 $1,000,000 Net
adelina 88 [10]

Answer:

the price earning ratio is 27 times

Explanation:

The computation of the price earning ratio is given below;

as we know that

price earning ratio

= Market price ÷ earning per share

= $67.50 ÷ ($150,000 ÷ 60,000 shares)

= $67.50 ÷ 2.5

= 27 times

hence, the price earning ratio is 27 times

Therefore the same should be considered

4 0
3 years ago
Aspen Integrated Marketing used to have a strict hierarchical structure, with information given only to those who required it. T
Brums [2.3K]

Answer:

open-book management or it can also be called a boundaryless organization.

Explanation:

Open-book management

This is simply the act of sharing with employees at all levels of an organization some vital information that is somehow or previously meant for too management staff only. It also involves opening a company's financial statements to all employees and giving them the education that will enable them to understand how the company makes money and how their actions affect its success and bottom line.

Boundaryless organization

This is simply known as a form of organization structure in which there are no barriers to information flow. Boundaryless designs include barrier-free, modular and virtual organizations. An organization without barriers has permeable internal and external boundaries and requires higher level of trust and shared interests, a shift in philosophy from executive development to organizational development, greater use of teams etc.

4 0
3 years ago
A company which uses more than one ________ will often locate near break-of-bulk points.
DENIUS [597]
A company that makes use of more than one <span>transport mode will locate near break-of-bulk points. A break-of-bulk point is a location or place where products are moved from one mode of transport to another place. One good example is the docks where goods </span>transfer<span> from ship to truck.</span><span> </span>
3 0
3 years ago
A major casual dining chain decided to install tablet computers at the booths in their restaurants. Customers can now browse the
neonofarm [45]

<u>Answer:</u> They can best be classified as structurally unemployed.

<u>Explanation:</u>

Unemployment which has resulted because of the change in technology that is implemented in a business can be called as the structural unemployment. The skills demanded by the employers differs from the skills offered by the workers.

The casual dining has replaced the employees with tablets which is cost beneficial for the business. The employees who have lost their jobs due to technological change at workplace is called as structural unemployment. Here the casual dining is said to have industrial reorganization for various benefits.

3 0
4 years ago
Which of the following would not be an ethical problem created by employee relationships
Volgvan

Answer:

The correct answer is letter "B": Investors expecting a return on their investment regardless of the cost.

Explanation:

<em>Ethical employee relationships</em> arise when one worker does not show his or her personal values affecting another employee. It is the result of the interaction between them that could lead to the violation of the Code of Ethics of the company.

Thus, <em>if investors expect returns on their investments, there is no employee conflict in that situation, ethical or not.</em>

6 0
4 years ago
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