Tomatoes are an input in the production of ketchup, and ketchup and mustard are substitutes. An increase in the price of tomatoes will LOWER the total surplus in the market for mustard
Answer:
$60600.
Explanation:
Differential Costs:
Materials costs = $62,000 - $27,000
= $35,000
Processing costs = $33,000 - $33,000
= $0
Equipment rental = $28,400 - $10,800
= $17,600
Occupancy costs = $27,400 - $19,400
= $8,000
Sum of all differential cost = $35,000 + $0 + $17,600 + $8,000
= $60,600
Therefore, the differential cost of Alternative B over Alternative A, including all of the relevant costs is $60600.
I think the answer is A
Hope this helps:)!!!
Answer:
$3,716.37
Explanation:
Initial investment $70,000 (cost of the equipment)
Depreciation expense per year = (cost- salvage value) / useful life = ($70,000 - $0) / 5 years = $14,000
net cash flows per year (the same for every year):
[(revenues - operating expenses - depreciation expense) x (1 - tax rate)] + depreciation expense = [($30,000 - $11,000 - $14,000) x (1 - 30%)] + $14,000 = $3,500 + $14,000 = $17,500
year NCF
0 -$70,000
1 $17,500
2 $17,500
3 $17,500
4 $17,500
5 $17,500
6% discount rate
using a financial calculator, the NPV = -$70,000 + $73,716.37 = $3,716.37
$73,716.37 is the present value of the 5 future cash flows
