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m_a_m_a [10]
3 years ago
14

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7

.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.9 million to build, and the site requires $940,000 worth of grading before it is suitable for construction.
Required:
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Business
1 answer:
professor190 [17]3 years ago
7 0

Answer:

$33,540,000

Explanation:

initial investment:

  • opportunity cost of land (resale price of land) = $10,700,000
  • building cost of the facilities = $21,900,000
  • other expenses related to the site (grading) = $940,000
  • total $33,540,000

The purchase cost of the land is considered a sunk costs, since it is not relevant now. What is relevant is the price at which the land could be sold at the moment of starting the project.

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the the law of diminishing marginal returns group of answer choices causes average total cost to rise at a decreasing rate as ou
Rasek [7]

The law of diminishing marginal returns---<u>explains why the average </u><u>total costs</u><u> and</u><u> marginal cost curves </u><u>are U shaped in the </u><u>short run.</u>

<u />

Option C is correct.

<h3>What is the law of diminishing marginal returns?</h3>

The law of diminishing marginal returns states that when a firm uses more than one variable factor of production for a given fixed quantity of factors of production, the marginal product of the variable factor of production that will eventually drop.

<h3>Why is diminishing profit margin important?</h3>

The law of diminishing marginal returns is one of the fundamental principles of economics and is very important in finding the right balance of production in an organization. Regardless of the nature of the business, understanding the law of diminishing marginal returns will have a direct impact on its performance.

Learn more about law of diminishing marginal returns :

brainly.com/question/28481234

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8 0
1 year ago
Factory owners may tolerate sweatshop conditions in an effort to keep production __________ and costs __________.
Jlenok [28]
Factory owners may tolerate sweatshop conditions in an effort to keep production HIGH and costs LOW.

Every factory owner aims to produce its maximum quantity of output at lesser costs. This is to ensure that the generated profit will be higher. 

Production is low and costs are high. Revenue will be low and profit will also be low.
4 0
3 years ago
Read 2 more answers
Number Style Which of the following sentences apply correct number style? Check all that apply.
34kurt

Answer:

1. We prefer that our interns have completed Finance 201 and an advanced professional communication course.

• He hopes to have at least $2 million in his retirement account by the time he turns 40

b • She has scheduled the meeting for March 11, 2008, at 8 a.m.

c. The average salary increase for Division 45 employees was 2.8 percent last year.

d. Three-fourths of the respondents

Explanation:

It should be noted that the numbers from one to ten should be written in word form, while those from 11 and above can be written in figures.

The numbers such as percentages that starts a sentence needs to be written in words. Therefore, 57% should be written in words

Therefore, the correct options are:

• We prefer that our interns have completed Finance 201 and an advanced professional communication course.

• He hopes to have at least $2 million in his retirement account by the time he turns 40.

Other correct options to the question include:

b. She has scheduled the meeting for March 11, 2008, at 8 a.m.

For information that has to do with meetings, the numbers should be written in numerical form.

c. The average salary increase for Division 45 employees was 2.8 percent last year.

d. Three-fourths of the respondents

The number should be written in words since it begins the sentence.

3 0
3 years ago
Trendy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each pa
harina [27]

Answer:

Results are below.

Explanation:

<u>To calculate the contribution margin and contribution margin ratio we need to use the following formulas:</u>

contribution margin= selling price - unitary variable cost

contribution margin= 2 - 1.2= 0.8

contribution margin ratio= contribution margin / selling price

contribution margin ratio= 0.8 / 2

contribution margin ratio= 0.4

<u>Now, we can calculate the break-even point in units and dollars:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 85,000 / 0.8

Break-even point in units= 106,250

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 85,000 / 0.4

Break-even point (dollars)= $212,500

<u>Finally, the desired profit is $26,000:</u>

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= 111,000 / 0.8

Break-even point in units= 138,750

4 0
3 years ago
When DVD players were first introduced, the price was very high, thereby preventing the average consumer from purchasing one. To
Oduvanchick [21]

Answer:

The correct answer is: the acquisition of the products.

Explanation:

To begin with, in the USA and in other countries as well, the laws that prevent the damage of the consumer by taking care about the competition, avoiding monopolies and regulating as well those two main factors, encourage the fact that most of the people could afford most of the goods that in the past may have been privileges. Moreover, by protecting the competition the governments ensure the fact that substitutes are developed for every product possible and therefore if more goods are available in the market then the most of the people would have access to them.

6 0
3 years ago
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