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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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ikadub [295]

Answer:

The correct answers are: greater​ than; less than.

Explanation:

In the perfect competition model, the nature of the scale returns poses serious problems, whatever the case considered. Sise assumes that the returns of scale are increasing, the supply of companies is infinite; if they are constant, the offer is null, infinite or indeterminate (equilibrium case); if they are decreasing, the profit of the companies is strictly positive in the balance '. In the latter case, if they could do so, companies would be interested in dividing themselves, without any limit, into entities as small as possible.

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3 years ago
A budget that is based on the actual activity of a period is known as a:__________.
mash [69]

Answer:

A

Explanation:

8 0
3 years ago
A company uses the retail method to estimate inventories. The following information is for the first six months of the current y
Tanya [424]

Answer:

The correct answer is $240,000.

Explanation:

According to the scenario, given data are as follows:

Beginning inventory at cost = $70,000

Beginning inventory at retail = $100,000

Net purchases at cost = $270,000

Net purchases at retail = $360,000

Total sales = $320,000

According to the LIFO method.

Particulars                        Cost                       Retail              Cost/Retail Ratio

Beginning inventory             $70,000                $100,000                     70%

Net purchases                      $270,000              $360,000                     75%

Total Inventory                     $340,000             $460,000

Total sales                                                       $320,000

Ending inventory ( Estimated )

($360,000-$320,000)× 75%  $30,000

$70,000 × 70%                      $70,000

Ending inventory at cost         $100,000

Estimated cost of goods sold   $240,000.

Hence the correct answer is $240,000.

7 0
3 years ago
There are 6 cities (1-6) in Araxi County. The county must determine where to build fire stations. The county wants to build the
nikdorinn [45]

Answer:

a.

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So there are six decision variables each taking a value of either 0 or 1.

D1 = decision to build fire station in city 1, (1 denotes yes and 0 denotes no)

D2 = decision to build fire station in city 2, (1 denotes yes and 0 denotes no)

D3 = decision to build fire station in city 3, (1 denotes yes and 0 denotes no)

D4 = decision to build fire station in city 4, (1 denotes yes and 0 denotes no)

D5 = decision to build fire station in city 5, (1 denotes yes and 0 denotes no)

D6 = decision to build fire station in city 6, (1 denotes yes and 0 denotes no)

b.

Please look at attachment

C .

The figure 1 denotes the problem formulation in excel and shows all the formulas.

In first step, a matrix is prepared to denote all cities which are within 15 minutes by 1 and others by zero

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A product of the selection variable and the value in the within 15 minutes matrix is calculated as shown by the formula.

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d.

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Explanation:

3 0
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garri49 [273]

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