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I am Lyosha [343]
3 years ago
13

Your company has a customer who is shutting down a production line, and it is your responsibility to dispose of the extrusion ma

chine. The company could keep it in inventory for possible future product and estimates that the reservation value is $250,000. Your dealings on the second-hand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay 400,000, and a 0.25 chance it will not sell. If you must commit to a posted price, what price maximizes profits?
Business
1 answer:
topjm [15]3 years ago
8 0

Answer: $350,000

Explanation:

Commit to the amount with the highest expected value:

Expected value at $300,000:

= (0.4 * 300,000) + (0.6 * 250,000)

= $‭270,000‬

Expected value at $350,000:

= (0.25 * 350,000) + (0.75 * 250,000)

= $275,000

Expected value at $400,000

= (0.1 * 400,000) + (0.9 * 250,000)

= $265,000

Expected value if no sales:

= (0.25 * 0) + (0.75 * 250,000)

= $187,500

<em>Price that maximises profits is $350,000 as it has the highest expected value. </em>

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d1i1m1o1n [39]

Answer:

D

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Flying Car

Cash flow in year 0 = -$200,000

Cash flow in year 1 = 50,000

Cash flow in year 2 = 50,000

Cash flow in year 3 =80,000

Cash flow in year 4 =100,000

IRR = 13%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

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3 years ago
Which of the following protects the brokers commission
mrs_skeptik [129]

Answer:

A safety protection clause in a listing agreement entitles the real estate broker or agent to a commission after the listing expires or is canceled. This applies when the final buyer was brought to the deal by the broker.

5 0
3 years ago
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marishachu [46]

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The government can influence interest rates, print money, and setting bank reserve requirements are all tools central banks use to control the money supply. Other tactics central banks use include open market operations and quantitative easing, which involve selling or buying up government bonds

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2 years ago
Consider firms that introduce new​ products, such as DVDs in 2001. When firms introduce new​ products, how do they typically det
lyudmila [28]

Answer:

D. estimate price elasticity of demand by experimenting with different prices.

Explanation:

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ecord adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made
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Answer: Please Refer to Explanation

Explanation:

Please see complete question attached to this answer.

A.

As the company has not paid the salary but they recognize it is an expense, it should be credited to Salaries payable from the salary expense account.

DR Salary Expense $ 18,500

CR Salary Payable $18,500

( To record Salary Expense incurred but not paid)

B.

As the company has not paid the interest but they recognize it is an expense, it should be credited to Interest Payable from the interest expense account until it is paid.

DR Interest Expense $400

CR Interest Payable $400

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DR Mortgage Interest Expense $1,025

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