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3 years ago

Profit maximization occurs when:

Business

1 answer:

lianna [129]3 years ago

3 0

Answer:

The correct answer is option B.

Explanation:

Profit maximization refers to the situation when a firm is able to maximize the total profit that it could earn through the production of goods and services.

The total profit is maximized when the marginal profit is zero or when the marginal revenue is equal to marginal cost. The marginal profit is the difference between marginal revenue and marginal cost.

If the marginal revenue is greater than the marginal cost the firm should increase production till both are equal.

In case, marginal revenue is less than the marginal cost the firm should stop producing more and reduce production till both are equal.

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3 years ago

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Alex

Answer:

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Direct Materials Purchases Budget

For July, August and September

July August September Total

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Direct materials per unit (ounces) 15 15 15 15

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3 years ago

Industrial Machines needs to purchase a new machine costing $1.25 million. Management is estimating the machine will generate ca

max2010maxim [7]

Answer:

The firm shouldn't purchase the machine because the IRR is less than the required minimum

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a financial calcuator

Cash flow in year 0 = $-1.25 million.

Cash flow in year 1 = $210,000

Cash flow in year 2 to 5 = $350,000

IRR = 8.51%

The firm shouldn't purchase the machine because the IRR is less than the required minimum

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button

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3 years ago