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Ratling [72]
3 years ago
6

In the following examples, state how you would use the principle of marginal analysis to make a decision.

Business
1 answer:
kogti [31]3 years ago
5 0

Answer:

Human beings make decisions at the margin which means that they make decisions depending on if the marginal benefits outweigh the marginal cost.

a. Deciding how many days to wait before doing your laundry.

Here the marginal benefit of waiting before you do your laundry is that you will have extra time to do other things you want to do. The marginal cost however would be that you will keep having less and less clothes to be able to choose from. Therefore the amount of time that you will take before doing your laundry depends on whether you value your free time over the amount of clothes you have to choose from.

b. Deciding how much library research to do before writing your term paper.

The marginal benefit here would be that if you use a lot of research your work will be more in-depth as you will find more information ( past or present) that will help you do the research. The marginal cost however is that you will have less time to do other things such as going to classes. Your decision would depend on if you think the research is more important than time for those other things or vice versa.

c. Deciding how many bags of chips to eat

Marginal benefit would be satiating your hunger. Marginal cost would be the calories you might gain as well as the cost of the chips. You will make a decision depending on if you believe the hunger being satiated is more beneficial than the calories gained and the money spent.

d. Deciding how many lectures of a class to skip

Like the first decision, the marginal benefit here would be the extra time you would gain to do other things. The marginal cost however, would be the risk of falling behind on material. Your decision will depend on if you value your extra time more than falling behind. If you do, you will miss more lectures. If you don't you will miss less lectures.

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Answer:

True

Explanation:

The statement is true; companies usually attain extra financing either by debt or equity (Preferred stock or common stock). Organisations for the most part have a decision with respect to whether to look for Preferred stock, common stock or Debt financing. The decision frequently relies on which source of financing is most effectively available for the organisation. Firms and organisation use that extra funds from stock to invest in new ventures and to buy new machinery, which increases the overall assets of the company.

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3 years ago
Payback Period Payson Manufacturing is considering an investment in a new automated manufacturing system. The new system require
MrRissso [65]

Answer:

a. 4 years

b. 5 years

Explanation:

The payback period is the time taken for the cash inflows from an investment to equal to the initial cash outflow or amount invested. To get this, the cash inflow are deducted from the outflows until the net is zero.

Considering both expected cash flows (all amounts in $);

Period    Initial out flow   Inflow         Balance         Inflow         Balance

Year 0    (1,200,000)              0          (1,200,000)       0            (1,200,000)      

Year 1                             300,000       (900,000)    150,000     (1,050,000)

Year 2                            300,000       (600,000)    150,000     (1,050,000)

Year 3                            300,000       (300,000)    400,000     (1,050,000)  

Year 4                            300,000               0           400,000     (1,050,000)  

Year 5                                                                        100,000     (1,050,000)

From the table above, with an inflow of $300,000 yearly, the inflows would equal the total outflow in 4 years while the annual cash flows: $150,000, $150,000, $400,000, $400,000, and $100,000 would make the inflows equal to the outflows in 5 years.

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3 years ago
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pantera1 [17]
<h3>Answer:</h3>

Gazelle

<h3>Explanation:</h3>
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True.
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Answer:

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