Answer: This means: "d. Your economic profit has gone down and your accounting profit has stayed the same."
Explanation: The difference between the accounting and economic benefit is associated with the type of cost that each includes:
The accounting benefit is nothing more than the difference between income and cost. In this case it is still $50000.
The economic benefit includes not only explicit costs. The economic benefit is the difference between income and total costs (explicit and implicit). Therefore, this benefit is less than the accounting benefit. Because in this case the cost of working at home is considered.
Answer:
The correct answer is $83230
Explanation:
Solution
Given that:
The Present worth of geometric series is shown below
= A *[1 - (1+g)^n /(1+i)^n] / (i-g)
Now,
The present cost of worth from EOY 5 to EOY 13 at EOY 4 = 7000 *[1 - (1+0.12)^9 /(1+0.15)^9] / (0.15-0.12)
Thus,
= 7000 *[1 - (1.12)^9 /(1.15)^9] / (0.03)
Which is,
= 7000 * 7.0572647
= 49400.85
Now, The NPW of all costs = 35000 + 7000*(P/A,15%,4) + 49400.85*(P/F,15%,4)
= 35000 + 7000*2.854978 + 49400.85*0.571753
= 83229.93
Therefore the sound improvement better result in a net present worth profit of how much to negate the costs is $83229.93 or 83230
Note: EOY = End of year.
Answer:
The estimate value of the subject property is $8,269,200
The other information that would be desirable in reaching a conclusion:
The closeness of the property to central business districts as the closer it is the higher the asking price.
The estimate was solely based on revenue, the applicable costs have been ignored.
The average taken might not be a good indication for the subject property because the property might have unique features
Explanation:
The formula for Gross Rent Multiplier is given Property Price / Gross Monthly Rental Income.
In determining the estimate value of the subject property ,we calculate the gross rent multiplier of the new property,then multiply it with the annual rental income.
In ascertaining the GRM of the new property we take the average GRM of the two similar properties in the same area.This is because the new property judging from number of units, lies in-between the other two properties.
GRM for Oaks
GRM=$9000000/($550*140)
GRM =116.88
GRM for Palms
GRM=$6,600,000/($650*90)
GRM =112.82
The average GRM=(116.88+112.82)/2
=114.85
Subject property price=114.85*(120*$600)
=$8,269,200
Answer:
the possible income from producing an additional item.
Explanation:
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