Answer:
-3 million dollars
Explanation:
we have EVA = economic value added
to ge the EVA, we use this formula :
(operating return on the assets - cost of the total capital) multiplied by the total assets
total assets = 100 million
operating return = 12 percent
cost of capital = 15 percent
the EVA = 12% - 15% * 100000000
= -0.03 * 100000000
= -3,000,000 dollars
b. The loss of the value of the shareholder is happening even though the firm is earning ROI that is more than the average firm in the industry.
Answer:
Effect on income= $120,000 loss
Explanation:
Giving the following information:
Sales $320,000
Variable costs $200,000
Fixed costs $140,000.
None of the fixed costs are avoidable. Therefore, they shouldn't be taken into account to make the decision.
Effect on income= Sales - varaible cost
Effect on income= 320,000 - 200,000= $120,000 loss
Answer:
c. value of all final goods and services produced within a country in a given period of time.
Explanation:
GDP is the value of all final goods and services produced within a country in a given period of time.
GDP = Consumption + Investment + Government Spending + Net Exports
GNP is the value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time.
To know how much you'll have by the end of the 15th year, you need to calculate <span>the future value of an annuity as follows:
</span><span>the future value of an annuity = investment [( 1 + interest)^number of years -1)] / interest
</span>
Substituting with the givens, you can get the future value annuity as follows:
<span>the future value of an annuity = 3500 [(1+0.05)^15 -1)]/0.05
</span> = 75524.97 $
The correct choice is (b)
Answer:
B. It depends on the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients.
Explanation:
As the barber is currently cutting hair for 50 clients per week and earns a profit. He is now considering expanding his operation in order to serve more clients. He should expand his business by considering the marginal cost of serving more clients and the marginal revenue he will earn from serving more clients. Marginal revenue and marginal cost has much importance here in order to make the decision. Marginal revenue is the profit which is obtained by selling one extra unit, here serving one more additional customer, whereas, the marginal cost is selling that one extra or additional unit/serving the customer. In this particular case, if the marginal revenues are greater than the marginal costs then he should definitely expand his operations, which means that move will bring more profits to his business.
