Net operating income was $24000
Fixed expenses=$96000
Sales=$300000
cost per unit=$20
unit sales=$15000 units
CM=$120,000
CM per unit=$8
BE units=FC/CM per unit=96000/8=12,000 units
Answer:
1. Payback period = 2.8 years
2. Break-even time = 3.8 years
3. NPV = $12,577
Explanation:
NOTE: See the attached excel file for the calculation tables.
1. Determine the payback period for this investment.
Payback period = 2 years and [(49,600 / 70,800) * 12] months = 2 years and 8 months approximately = 2.8 years.
2. Determine the break-even time for this investment.
Break-even time = 3 years and [(23,622 / 36,199) * 12] months = 3 years and 8 months approximately = 3.8 years
3. Determine the net present value for this investment.
Net present value (NPV) of this investment is $12,577
Answer:
B. is the price at which a firm's total revenues equal total costs
Explanation:
The short run in economics is a period of time in which one factor of production is fixed and others are varied. In the short run, the market is not fully in equilibrium. Break even is the point in which the total cost used in the course of production is equal to the total revenue earned from the products produced. In a break even scenario, there is no profit and there is no loss. At this point, firms are making normal rate of return on money invested and are able to settle all cost of production.
Answer:
d. above the equilibrium level, causing a surplus of labor.
Explanation:
Market wage equilibrium refers to the ideal wage rate where the labor supply and demand curves intersect. At equilibrium wage, the benefits derived from an extra worker equals the cost associated with the additional worker.
The efficiency wage theory advocates for higher wages to motivate employees to increase production. Minimum wage laws and trades unions negotiate for higher wages above the equilibrium rate. Trade unions will fight to keep the maximum number of employees or their members in employment.
