Answer:
These data suggest that Ms. Thomson should buy less of B and more of A.
Explanation: When comparing the marginal utility of two products, it is advised that a consumer should buy more of the product that give them the highest marginal utility per unit money spent on such a product.
What this basically means is this, for a consumer to maximize their utility, they should spend more on products that yield the highest marginal utility per unit money.
Therefore in the scenario given above, we will calculate to see which product yields the highest marginal utility.
For product A, the marginal utility per dollar is 16/2 = 8.
For product B, the marginal utility per dollar is 24/4 = 6.
We can now see that Product A has this higher marginal utility per dollar, and therefore, more of this product should be consumed and less of Product B should be consumed.
Answer and Explanation:
The computation of the missing amounts is shown below:
a. Common stock
= Total Liabilities and Stockholders' Equity - total liabilities - ending retained earnings
= $69,100 - $5,200 - $34,100
= $29,800
b. Retained earnings is $34,100
c. Cost of goods sold
= Revenues - salaries & wages expense - net income
= $85,800 - $10,400 - $19,710
= $55,690
Here net income would be
= Ending retained earnings + dividends - beginning retained earnings
= $34,100 + $4,710 - $19,100
= $19,710
d. Net income is $19,710
e. Net income is $19,710
For the first investment the solution as follows
Annual depreciation
600,000÷6 years=100,000
Net annual cash flows
100,000+155,000=255,000
Present value
255,000×4.11141+16,600×0.50663
=1,056,819.608
Net present value
1,056,819.608−600,000=456,819.608
For the second investment the solution as follows
Annual depreciation
390,000÷8 years=48,750
Net annual cash flows
48,750+60,000=108,750
Present value
108,750×4.96764+24,500×0.40388
=550,125.91
Net present value
550,125.91−390,000=160,125.91
This question is incomplete.
The complete question, answer & explanation for this question is given in the attachment below.
Answer:
Receiving $2,000 every year for 6 years is worth more today.
Explanation:
$2,000 received per year is annuity as same amount is received every year.
Given:
Amount received every year = $2,000
Time period = 6 years
Rate = 5%
Check PVIFA (Present value of annuity factor) table for 5% and 6 years, we get 5.0757
Present value of annuity = 2,000 × 5.0757
= $10,151.4
Receiving $2,000 every year for 6 years is worth more today than receiving $10,000 today as present value of annuity is worth $10,151.4 today which is more than $10,000.
So, $2,000 every year is worth more today.
