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3 years ago

Definition of economic costs

Business

1 answer:

crimeas [40]3 years ago

6 0

Answer:

1. I grouped the costs into explicit and implicit costs below

2. accounting profit = 89000

3. economic profit = 3000

4. daniel should stay in the piano business

Explanation:

explicit costs include:

1. The wholesale cost for the pianos that Darnell pays the manufacturer at $452000

2. The wages and utility bills that Darnell pays at $301000

the implicit costs include:

1. The salary Darnell could earn if he worked as an accountant at $48000

2. The rental income Darnell could receive if he chose to rent out his showroom at $38000

accounting profit:

842000-452000-301000

= 89000

economic profit:

842000-452000-301000-48000-38000 = 3,000

as an accountant economic profit:

48000+38000-89000

= -3000

so he should stay in the piano business so that economic profit would be maximized.

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A proposed new investment has projected sales of $557,000. Variable costs are 39 percent of sales, and fixed costs are $131,000;

Lana71 [14]

Answer

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Explanation

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3 years ago

Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that injures her hands. jean files a suit

Lyrx [107]

The doctrine of strict liability is a legal doctrine and makes a person or company responsible for the products being sold or actions and services that may have caused damages regardless of the negligence of the user. In this regard, the strict liability doctrine may also be filed against the area of other good manufacturing.

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3 years ago

Take It All Away has a cost of equity of 11.17 percent, a pretax cost of debt of 5.32 percent, and a tax rate of 40 percent. The

frozen [14]

Answer:

WACC=(Ke*E+D*Kd)/(E+D)

Explanation:

Ke (Cost of Equtiy)=11.17%

Kd (Cost of Debt)=5.32%

E (Market value of Equity)=?

D(Market Value of Debt)=65

If D market value is 31% of Total Market value of company so by grossing up D We get E+D=65/.31=210. So E=210-65=145

WACC=(Ke*E+D*Kd)/(E+D)

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3 years ago

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Michael Mirer worked for Dawson Company for six months t

lisov135 [29]

Answer:

$83.4

Explanation:

Under FUTA, only the first $7000 earning per year will be taxed. Any amounts above $7000 will be tax-exempt.

For Michael, the tax will be calculated as follows.

for the$11200 earned in Dawson company

=0.6% x $7000

=0.06/100 x 7000

=0.006 x 7000

=$42

Amount earned working at McBribe

=0.06% x 6900

=0.006 x $6900

=$41.4

Total to be paid by the two companies

=$42 + $ 41.4

=$83.4

5 0

4 years ago

Disruptive innovation is a process by which a product or service takes root initially in simple applications at the bottom of a

ValentinkaMS [17]

Answer:

The correct answer is True.

Explanation:

The concept of “Disruptive Innovation” is relatively new, it was introduced by Clayton Christensen in 1997 in the book “The innovators dilemma” and refers to how a product or service that originally was born as something residual or as a simple application without Many followers or users quickly become the leading product or service in the market.

Disruption therefore occurs when emerging companies use new technologies or new business models and outperform the market that were the leaders until then.

There comes a time when users do not perceive as a differential advantage the type of evolutionary innovation that has been applied to a product, because they no longer need all those new features that the manufacturer has added to increase the profit and then the manufacturer becomes vulnerable and the evolution of that particular product ceases to be decisive, from that moment the price of that product can become decisive or another product will arrive with a new disruptive technology that will compete with the previous product and with the established technology. The most normal is that new products or services are easier to use and cheaper than products that were already on the market before and thus quickly capture the interest of consumers.

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3 years ago