1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Naily [24]
3 years ago
15

Your buddy in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes

one year to manufacture $ 200. ​However, once​ built, the machine will last forever and will require no maintenance. The machine can be built​ immediately, but it will cost $ 2 comma 000 to build. Your buddy wants to know if he should invest the money to construct it. If the interest rate is 11.5 % per​ year, what should your buddy​ do?
Business
1 answer:
sergey [27]3 years ago
5 0

Answer: He should decline production of the machine.

Explanation:

Analyzing the problem, we can determine if he should proceed or not by calculating the Net present value. That is present value of the machine in terms of perpetuity as it will be used forever and the cost incurred in its production.

Given the following ;

To manufacture $200 = 1 year, meaning

Amount or yearly payment = $200

Cost of machine = $2,000

Interest rate(r) = 11.5% = 0.115

Recall;

Present the value if perpetuity ;

(Payment per period ÷ rate)

= $200 ÷ 0.115 = $1739.13

Net present value = $1,739.13 - $2000 = - 260.87

Given the negative value of NPV, the cost outweighs the benefit, hence, he should decline.

You might be interested in
You decide to eat one more chip. the change in the total amount gained that comes from this action is the _____ . marginal cost
kow [346]

Marginal cost is the incremental cost incurred for one additional unit.

Marginal benefit is the incremental benefit gained from the one additional unit.

The maximized utility is the concept of getting maximum values from the minimum expenditure.


If you decide to eat one more chip. the change in the total amount gained that comes from this action is the Marginal benefit.


Hence the correct answer is the <u>Marginal benefit</u>



4 0
3 years ago
Read 2 more answers
PLEASE ANSWER ASAP WILL GIVE BRAINLIEST AN LOTSSSS OF POINTS
Luba_88 [7]

Explanation:

1a)\frac{(2000 \times 10 \times 5) + (3000 \times 5 \times 6.5)}{100 + 100 }  \\  = \frac{100000 + 97500}{100 + 100}  \\  = 1000 + 975 + 1500 + 800 \\ 4275

7 0
3 years ago
Read 2 more answers
Boswell company manufactures two products, regular and supreme. boswell's overhead costs consist of machining, $3,000,000; and a
yawa3891 [41]
Total overhead costs
3000000+1500000=4500000

Total direct labor hours
10000+15000=25000 hours

Predetermined oH rate
4500000÷25000=180

Overhead applied to regular
180×10000 h =1800000...answer


4 0
3 years ago
You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 78 − 15Q, where Q =
Leona [35]

Answer:

correct option is B. 40.5

Explanation:

given data

P = 78 - 15 Q

Q = Q1 + Q2

MC1 = 3Q1

MC2 = 2Q2

to find out

What price should be charged to maximize profits

solution

we get here first total revenue and marginal revenue that is

total revenue TR = P × Q   .......1

total revenue TR = 78Q - 15Q²

and

marginal revenue MR = \frac{change\ in\ TR}{change\ in\ Q}

marginal revenue MR = 78 - 30Q

now we get here

marginal revenue MR = MC1 = MC2

put here value

78 - 30Q1 - 30Q2 = 3 Q1 or 33 Q1 = 78 - 30Q2   ......................................a

78 - 30 Q1 - 30 Q2 = 2 Q2 or Q2 = 78 - 30Q1/32   ................................b

by equation a and b we get here

33 Q1 = 78 - 30 (78 - \frac{30Q1}{32} )

so here Q1 = 1 and

Q2 = 78 -  \frac{30*1}{32}

Q2 = 1.5

so that Q will be

Q = Q1 + Q2

Q = 1 + 1.5

Q = 2.5

now we get value of P that is

P = 78 - 15 Q

P = 78 - 15 (2.5)  

P = 40.5

so charged to maximize profits is 40.5

so correct option is B. 40.5

5 0
3 years ago
Craig, one of the senior managers at Clayton Inc., insisted that company supervisors handle employee relations as part of their
Alekssandra [29.7K]

Answer:

The supervisors represent the company on a day-to-day basis.

Explanation:

Craig said that the supervisors take employee relations as part of their jobs.

The option that buttresses this is that supervisors represent the company on a day-to-day basis. Meaning the supervisors as owners of the company, and as if they have a stake. Supervisors taking ownership presupposes they perform tasks like handling employee relations to ensure the business and the employee work harmoniously.

5 0
3 years ago
Other questions:
  • Organizations that are formed to offer services to clients and not make a profit are ____, whereas, ________ are those organizat
    10·1 answer
  • Which best exemplifies the use of social media to save lives in a fast moving disaster event?
    11·1 answer
  • Rockeagle Corporation began fiscal Year 2 with the following balances in its inventory accounts.
    11·1 answer
  • Although a consumer may be happy with your company’s product/service, they will not hesitate to switch if another company provid
    9·1 answer
  • Which of the following statements explains what information bank customers will most typically receive when securing loans?
    10·1 answer
  • What cycle time would match capacity and demand if demand is 161 units a day, there are 2 shift(s) of 446 minutes each, and work
    9·1 answer
  • Which of the following statements about the importance of each competitive factors (but especially such highly influential facto
    8·1 answer
  • Mr. Dealer bought a fleet of SUVs (sport utility vehicles) from General Motors (GM) on credit, GM agreeing not to assign the res
    11·1 answer
  • g An equity issue sold to the firm's existing stockholders is called a Group of answer choices private placement Rights offer ge
    14·1 answer
  • Major commercial business intelligence (BI) products and services were well established in the early 1970s. Group of answer choi
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!