Answer:
The correct answer is: a new law that interferes with economic efficiency.
Explanation:
A production possibilities frontier shows all the points where production is efficient. The resources are being completely employed. The points above the frontier are unattainable. The points below the frontier are attainable but inefficient.
If there is a movement from the frontier to a point below it. This means inefficient allocation of resources. It can happen because of some law interfering in efficient allocation of resources.
Answer:
A) $1384.24
Explanation:
Terminal Value = Free Cash Flow (FCF) of last forecast *(1+ perpetual growth rate)/(discount rate – perpetual growth rate)
FCF of last forecast = $88*(1+10%)^2 = $106.48
Gonzales Corporationʹs expected terminal enterprise value in year 2 = $106.48 * (1+4%)/(12%-4%) = $1382.24
Answer:
Financing decision
Explanation:
Financing decision is concerned with borrowing and allocating funds for investments.
As such, the decision to borrowed 745,000 dollars and use the fund to build a new restaurant for 745,000 dollars is a financing decision.
Capital Budgeting decision-making process involves plans around any long term capital expenditures whose returns (cash inflows and outflow) are expected to be earned in more than a year.
Answer:
a) attached below
b) P( profit ) = TR(q) - TC(q)
c) attached below
d) -$5000 ( loss )
Explanation:
Given data:
Fixed Cost = $10,000
Material cost per unit = $0.15
Labor cost per unit = $0.10
Revenue per unit = $0.65
<u>a) Influence diagram to calculate profit </u>
attached below
<u>b) derive a mathematical model for calculating profit.</u>
VC = variable cost per unit , LC = per unit labor cost , MC = per unit marginal cost, TC = Total cost of manufacturing , FC = Fixed cost, q = quantity, TR = Total revenue, R = revenue per unit
VC = LC + MC
TC (q) = FC + ( VC * q )
TR (q) = R * q
P( profit ) = TR(q) - TC(q) ------------ ( 1 )
c) attached below
<u>d) If Cox Electrics makes 12,000 units of the new product </u>
The resulting profit = -$5000
q = 12
P = TR ( q ) - TC ( q )
= ( R * q ) - ( Fc + ( Vc * q ) )
= ( 0.65 * 12000 ) - ( 10,000 + ( 0.25 * 12000 )
= -$5200
