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Marysya12 [62]
3 years ago
5

​greg, a​ landscaper, is planning on opening his own landscaping company. he currently earns​ $40,000 per year working for his u

ncle but he will need to quit that job. he plans to use​ $10,000 in savings to pay for the equipment he​ needs, though even after use he could sell the equipment for what he​ paid, $10,000. the current interest rate on savings is 5 percent. what is the total economic cost incurred by greg in running his own​ business?
Business
1 answer:
Oxana [17]3 years ago
5 0

Answer:

The total economic cost is $40,500 per year

Explanation:

The total economic cost per year is equal to the sum of:

* The opportunity cost relating to sacrificing the current work Greg is working on which is equal to his yearly salary of : $40,00.

* The opportunity cost relating to sacrificing the interest income earned on $10,000 saving, which he is now used for purchasing equipment, which is calculated as: 10,000 * current rate of savings = 10,000* 5% = $500 ( total cost of equipment is not included because e could sell the equipment for what he​ paid later on).

=> So, total economic cost per year is $40,000 + $500 = $40,500.

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How is efficiency related to the number of firms in an industry characterized by strong economies of scale?
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4 years ago
Parts and materials for skis made by Company C are supplied by two suppliers. Supplier​ A's materials make up 27​% of what is​ u
neonofarm [45]

Answer:

Supplier B more likely supplied the defective materials.

Explanation:

This exercise is solved in four steps:

1. Statistical events are defined:

A = (provider A)

B = (provider B)

D = defective materials

From the problem statement, 27% of the materials used by Company C are provided by supplier A. Therefore:

P (A) = 0.27.

The remaining 73% is provided by supplier B. Therefore:

P (B) = 0.73.

2. Conditional probabilities are established. In other words, what is the probability that the materials are defective? Remember that the "defect" is the condition that most interests the manager.

According to the example, 22% of materials from supplier A are defective. We can formalize this as follows:

P (D / A) = 0.22

On the other hand, 9% of supplier B materials are defective:

P (D / B) = 0.09

3. It will be determined what is the probability that each supplier has provided defective products by applying Bayes´ theorem.

3.1 The probability of this event will be found for supplier A:

The Bayes´ Theorem for this case is:

P (A / D) = \frac{P(A)  P(D/A)}{P(A) P(D/A) + P(B) P(D/B)}

We replace with the data obtained in the previous points (1 and 2):

P (A/D) = \frac{(0.27)(0.22)}{(0.27)(0.22)+(0.73)(0.09)}

P (A/D)= \frac{0.0594}{0.0594+0.0657}

P (A/D) = \frac{0.0594}{0.1251}

P (A / D) = 0.474

That means that approximately 47.4% of defective materials come from supplier A.

3.2 The probability of this event for provider B will be found.

The Bayes´ Theorem for this case is:

P (B/D) = \frac{P(B) P(D/B)}{P(A) P(D/A) + P(B) P(D/B)}

We replace with the data obtained in the previous points (1 and 2):

P (B/D) = \frac{(0.73)(0.09)}{(0.27)(0.22)+(0.73)(0.09)}

P (B/D)= \frac{0.0657}{0.0594+0.0657}

P (B/D) = \frac{0.0657}{0.1251}

P (B / D) = 0.525

That means that approximately 52.5% of the defective materials come from supplier B.

4. Compare the conditional probabilities.

If we compare P (A / D) and P (B / D), we can see that the largest is P (B / D) (47.4 < 52.5). Therefore, supplier B is more likely to have supplied defective materials.

7 0
4 years ago
The table below provides the total revenues and costs for a dental practice for one year.
RoseWind [281]

<u>Answer: </u>7.1 92000

7.2 70000

7.3 30000

7.4 -40000

<u>Explanation:</u>

7.1  Explicit cost means the cost which occurs to meet the expenses for the business operations

The explicit cost is calculated below.

Wages and salaries  700000

Interest on bank loan 50000

Cost supplies             150000

Depreciation                20000

Total Explicit cost     $920000

7.2  Implicit cost means the opportunity cost that is foregone by investing in other type of investment. Implicit cost is not incurred by the business actually.

Risk free return     30000

Risk premium        40000

Total Implicit cost $70000

*7.3  The difference between the cost and the revenue provides the accounting profit of the firm.

Accounting Profit

= Revenue - Explicit Cost

=950000 - 920000

Total accounting profit firm= $30000

7.4  Economic profit means the profit arrived by the firm after deducted the total of explicit and implicit cost.

Economic Profit

=Revenue - (Explicit Cost + Implicit Cost)

=950000 - (920000 + 70000)

Total Economic Loss incurred= $-40000

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