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3 years ago

What is the best definition of elasticity in economics?

1 answer:

5 0

<span>The theory of elasticity refers to the responsiveness of supply and demand to changes in price. The elastic product means that any change in price can result in changes in supply or demand. The inelastic product means that changes in price do not affect to a noticeable degree, supply or demand.</span>

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Savanna Company is considering two capital investment proposals. Relevant data on each project are as follows: Project Red Proje

liberstina [14]

Answer:

(a) Cash payback period:

Project Red = 5.5 years

Project blue = 4.6 years

(b) Net present value for project Red = $19,760

Net present value for project Blue =$164,580

(c) Annual rate of return:

Project Red =11.36%

Project Blue =18.75%

(d) Project Blue

Explanation:

Given Data;

Project Blue Capital investment = $640,000

Project Red Capital investment = $440,000

Project Red Annual Net income = $ 25,000.

Project Blue Annual Net income = $ 60,000

Annual depreciation Project Red = (440000/8)

= 55,000

Annual depreciation Project Blue = (640000/8)

= 80,000

Annual cash inflow project A = $ 80,000

Annual cash inflow project B = $140,000

(a)

Cash payback period = Initial investment/cash flow per period

Project Red = 440000 /80000

= 5.5 years

Project blue = 640000/ 140000

= 4.6 years

(b)

Project Red Present value of cash inflows = 80000 ×5.747

= $459,760

Project Blue Present value of cash inflows =140000×5.747

= 804580

Net present value for project Red = $459,760 - $440,000

= $19,760

Net present value for project Blue = 804580 - $640,000

=$164,580

Project Red = $25,000 / ($440000)/2

=11.36%

Project Blue = $60000/(640000/2)

=18.75%

(d) Savanna should select Project Blue because it has a higher positive NPV and a higher annual rate of return. AND Project Blue has early cash back period also

6 0

3 years ago

Grandma and Grandpa Generous had many children, but they have only one grandchild,Harold. Grandma and Grandpa would like to give

Leni [432]

Answer:

Gift Tax GSTT

Explanation:

In such a scenario, Grandma and Grandpa Generoushave a current liability to the Gift Tax GSTT. This tax rate applies to Grandma and Grandpa Generous because the gift exceeds the limit per individual for gifting and because they have exhausted their lifetime gift-tax exemption. Meaning that they have to pay taxes on this gift of $5.43 million which according to the GSTT guidelines is a fixed rate of 40% of the gift that was given.

8 0

3 years ago

The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $20,000 but no other as

Rashid [163]

Answer:

a. Contribution from Berry = $6,000

b-1. Contribution from Hammond = $22,556

b-2. Disbursement shall be:

Anderson = $8,889

Berry = $3,667

c. Amount to be received by Anderson on Liquidation = $11,500

Explanation:

As for the provided information we have,

Capital balances

Anderson 40% $20,000

Berry 30% $12,000

Hammond 20% $17,000 (Deficit)

Winwood 10% $25,000 (Deficit)

a. Total deficit in this case will be = Share of Hammond + Winwood = $17,000 + $25,000 = $42,000

Berry's share = $\frac{30}{30+40} \times 42,000 = 18,000$

Since Berry's current balance = $12,000

Contribution required = $18,000 - $12,000 = $6,000

b-1. Total deficit of Winwood = $25,000

Hammond share = $\frac{20}{20+30+40} \times 25,000 = 5,556$

Hammond's current balance = - $17,000

Thus, contribution from Hammond = $5,556 + $17,000 = $22,556

b-2. Total deficit balance = $17,000 + $25,000 = $42,000

Total sufficient balance = $20,000 + $12,000 = $32,000

Net deficit balance = $42,000 - $32,000 = $10,000

Anderson share in Deficit of Winwood = $25,000 \times \frac{40}{40 + 30 +20} = 11,111$

Thus, net capital of Anderson = $20,000 - $11,111 = $8,889

Berry's share in deficit of Winwood = $25,000 \times \frac{30}{40+30+20} = 8,333$

Thus, net capital from Berry = $12,000 - $8,333 = $3,667

c. Total deficit from Hammond = $17,000

Anderson share = $17,000 \times \frac{40}{40+30+10} = 8,500$

Anderson's current balance = $20,000

Amount extra contributed by Anderson = $20,000 - $8,500 = $11,500

Thus, Anderson will receive $11,500 on liquidation.

Final Answer

a. Contribution from Berry = $6,000

b-1. Contribution from Hammond = $22,556

b-2. Disbursement shall be:

Anderson = $8,889

Berry = $3,667

c. Amount to be received by Anderson on Liquidation = $11,500

3 0

3 years ago

The Dulac Box plant works two 8-hour shifts each day. In the past, 500 cypress packing boxes were produced by the end of each da

Alex787 [66]

The level of productivity is now approximately 40.6 boxes/hr

<h3>What is Productivity</h3>

Productivity refers to a ratio between a output volume and volume of input.

<u>Given data</u>

Working hours = 2*8 hours = 16 hours

New productivity = 500 + 0.3*500

New productivity = 650 box/day

New productivity =650/16 box/hour

New productivity = 40.625 box/hour

Hence, the level of productivity is now approximately 40.6 boxes/hr

Therefore, the Option B is correct.