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diamong [38]
2 years ago
6

A piece of medical equipment costs $350,000, has a useful life of 10 years and a salvage value of 10 percent of the original pur

chase price. Investments with similar risk earn a 12 percent rate of return. Calculate the average opportunity cost per year.
Business
1 answer:
mojhsa [17]2 years ago
4 0

Answer:

The answer is $59,948.7

Explanation:

Solution

Given that:

The Cost of medical equipment = $350,000

The Salvage value = 10% of cost of medical equipment = 0.10 * $350,000 = $35,000

Now,

The Useful life = 10 years

Thus,

It has been stated that investment with risk similar earn is a 12% rate of return.

Hence, the average opportunity cost per year is equal to the equal cost annual of this medical equipment.

So

We Calculate the equivalent annual cost -

Which is

EAC = Cost of medical equipment(A/P, i, n) - salvage value(A/F, i, n)

EAC = 350,000(A/P, 12%, 10) - [35,000(A/F, 12%, 10)]

EAC = [350,000 * 0.17698] - [35,000 * 0.05698]

EAC = 61,943 - 1994.3

EAC = 59,948.7

Therefore, the opportunity cost average per year is $59,948.7

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djyliett [7]
The answer should be b. (Sorry if I’m wrong)
4 0
1 year ago
Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the long run. If an increase in the demand
Scrat [10]

Answer:

Option (c) is correct.

Explanation:

Given that,

Price elasticity of supply for cheese = 0.6 in the short run

Price elasticity of supply for cheese = 1.4 in the long run

If an increase in the demand for cheese causes the,

Price of cheese to increase by 15%

In short run,

Price elasticity of supply for cheese = Percentage change in the quantity supplied ÷ Percentage change in the price

0.6 = Percentage change in the quantity supplied ÷ 15

0.6 × 15 = Percentage change in the quantity supplied

9% = Percentage increase in the quantity supplied

In long run,

Price elasticity of supply for cheese = Percentage change in the quantity supplied ÷ Percentage change in the price

1.4 = Percentage change in the quantity supplied ÷ 15

1.4 × 15 = Percentage change in the quantity supplied

21% = Percentage increase in the quantity supplied

8 0
3 years ago
Challenger Factory produces two similar products: regular widgets and deluxe widgets. The total factory overhead budget is $589,
alekssr [168]

Answer:

Challenger Factory

The total factory overhead that Challenger Factory will allocate to regular widget production if budgeted production is 75,000 units and actual production for the period is 127,500 units would be:

= $795,600.

Explanation:

a) Data and Calculations:

Total budgeted factory overhead = $589,600

Total estimated direct labor hours = 376,800

Overhead rate = $589,600/376,800 = $1.56

Direct labor hours per unit of widget = 4 hours

Budgeted production of regular widgets for the period = 75,000 units

Total direct labor hours for the period = 75,000 * 4 = 300,000 hours

Actual production of regular widgets for the period = 127,500

Total direct labor hours for regular widgets = 510,000 (127,500 *4)

Total factory overhead that Challenger Factory will allocate to regular widget production if budgeted production is 75,000 units and actual production for the period is 127,500 units would be:

= 510,000 * $1.56 = $795,600

3 0
2 years ago
A company with a completely fixed cost structure will have operating leverage of 1.a. Trueb. False
olganol [36]

Answer:

False. This is because 1 is an odd number and that it is too low in value.

5 0
3 years ago
On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for $62,000. The estimated service life is eig
spin [16.1K]

Answer:

The answer is $10,800

Explanation:

Straight line method of depreciation is:

Cost - residual value/number of useful life

Cost - $62,000

Residual value - $8,000

Number of years - 5years

=62,000 - 8,000/5

=57,000/5

$10,800.

Therefore, $10,800 will be charged every year.

8 0
3 years ago
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