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gavmur [86]
3 years ago
14

Two different methods of solving a produc­tion problem are under consideration. Both methods are expected to be obsolete in six

years. Method A would cost $80,000 initially and have annual operating costs of $22,000 per year. Method B would cost $52,000 and costs $17,000 per year to operate. The salvage value realized would be $20,000 with Method A and $15,000 with Method B. Investments in both methods are subject to a five-year MACRS property class. The firm’s marginal income tax rate is 40%. The firm’s MARR is 20%. What would be the required additional annual revenue for Method A such that an engineer would be indifferent to choosing one method over the other?
Business
1 answer:
DiKsa [7]3 years ago
6 0

Answer:

10781

Explanation:

In order to find the additional annual revenue for the two method a break even point must be calculated

Method A

=-8000(1.1)^6+20000(1.1)^6-22000-(u)

=-15776.44-22000 -u

=-37776.44-u

Method B

= -52000(1.1)^6+15000(1.1)^6-17000-2u

=9995.4-17000-2u

=-26995.47-2u

Then equate the two equations

-37776.44-u=-26995.47-2u

u=10781

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Irina18 [472]

The bundle that is going to maximize profit is going to be Late

<h3>How to find the bundle that would maximize profit</h3>

we have the net profit from early to be 7 + 5 = 12

We have the net profit from late to 6 + 10 = 16

We can see that the value for late is greater at 16 compared to that of the early.

Hence we can say that late has the greatest profit.

Next we have to solve for the profit that is made. This is the net profit.

The solution is given as 16 - 12 = 4

<h3>What is profit maximization</h3>

This is the process where by businesses would try to get the best output possible from the given inputs that they would use in the business. It goal is to be able to maximize the returns that they would make.

Read more on profit maximization here:

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8 0
2 years ago
An increase in interest rates affects aggregate demand by
skad [1K]

Answer:

Option (B) is correct.

Explanation:

When there is an increase in the interest rate then as a result this will shift the aggregate demand curve leftwards. This is because of the fall in one of the component of aggregate demand curve that is investment.

Increased interest rate will reduce the investment demand and hence shifts the aggregate demand curve rightwards. This increase in the interest rate will also increase the reserves of the banks.

When there is a leftward shift in the AD curve then as a result there is a fall in both real GDP and Price level in an economy.

5 0
3 years ago
Suppose your principal objective is to maximize the selectivity of monochloroethane production relative to dichloroethane produc
Makovka662 [10]

We are given the series of chemical reactions:

Ethane is chlorinated in a continuous reactor:

C2H6 + Cl2 --> C2H5Cl + HCl

 

But some of the product monochloroethane becomes further chlorinated by an undesired side reaction:

C2H5Cl + Cl2 --> C2H4Cl2 + HCl 

 

So to avoid the product monochloroethane to be further chlorinated, there must be fast processing or fast conversion of ethane so that there would less time for further chlorination. Hence we must design the reactor for high conversion of ethane.

 

To make the process economical, there must be a downstream separation step that would separate the main product monochloroethane from the undesired product dichloroethane.

4 0
3 years ago
Gross Inc. signs a five-year licensing agreement with Maiger Company. Gross Inc. will pay Maiger annual installment payments of
olganol [36]

Answer:

$4,500

Explanation:

First, calculate the total Installment

Total Installment payment = Annual Installment x Numbers of annual

Where

Annual Installment = $10,500 per year

Numbers of annual = 5 years

Installment payment = $10,500 per year x 5 years

Installment payment = $52,500

Now use the following formula to calculate the Interest payent

Interest payment = Installment Payment - Fair value of contract

Where

Installment Payment = $52,500

Fair value of contract = $48,000

Placing values in the formula

Interest payment = $52,500 - $48,000

Interest payment = $4,500

7 0
3 years ago
Fargo Company's outstanding stock consists of 400 shares of noncumulative 5% preferred stock with a $10 par value and 3,000 shar
kifflom [539]

Answer: Option (a) is correct.

Explanation:

Given that,

Dividend in 2016 = $20,000

Preferred Shares = 400

Par Value of Preferred Stock = 400 × 10 = $4000

Rate of Dividend of Preferred Stock = 5%

(a) Dividend to preferred Shareholders:

= Par Value of Preferred Stock × Rate of Dividend

= $4000  × 5%

= $200

(b) Dividend to Common Shareholders:

= Total Dividend - Dividend to Preferred Shareholders

= $20,000  - $200

= $19,800

6 0
3 years ago
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