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3 years ago

What is the opportunity cost in this scenario?

1 answer:

8 0

An opportunity cost is defined as the loss of a potential gain from going with another alternative. The opportunity costs in this situation are everything that Harry gave up, to see his parents. Although he gained the dinner with his parents that ha hadn't seen in awhile, he gave up a lot of other options on how he spent his weekend.

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Malone Imports stock should return 12 percent in a boom, 10 percent in a normal economy, and 2 percent in a recession. The proba

Rufina [12.5K]

Answer:

6.11%

Explanation:

For computing the variance, first we have to determine the expected return which is shown below:

= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)

= (12% × 5%) + (10% × 85%) + (2% × 10%)

= 0.6% + 8.5% + 0.2%

= 9.30%

Now the variance would equal to the

= Weightage × (Return - Expected Return) ^2

For boom:

= 5% × (12% - 9.3%) ^2

= 0.3645

For normal economy:

= 85% × (10% - 9.3%) ^2

= 0.4165

For recession:

= 10% × (2% - 9.3%) ^2

= 5.329

So, the total variance would be

= 0.3645 + 0.4165 + 5.329

= 6.11%

4 0

3 years ago

Sid has decided to leave his $70,000-a-year landscape design job and open a new kayak business. His insurance cost is expected t

madreJ [45]

Answer:

The correct answer is $15,500.

Explanation:

According to the scenario, the computation of the given data are as follows:

Revenue = $100,000

Insurance cost = $2,000

Design job leave = $70,000

Rent = $10,000

Annual depreciation = 10% × $25,000 = $2,500

So, we can calculate the economic profit by using following formula:

Economic Profit = Total Revenue - (Explicit cost + Implicit costs)

By putting the value, we get

= $100,000-($70,000 + $2,000 + $10,000 + $2,500)

= $15,500

7 0

3 years ago

Nu Furniture has sales of $241,000, depreciation of $32,200, interest expense of $35,700, costs of $103,400, and taxes of $14,63

Svetlanka [38]

Answer:

$122,963

Explanation:

NU furniture have a sales of $241,000

The depreciation is $32,200

The interest expense is $35,700

The costs is $103,400

The tax is $14,637

Therefore, the operating cash flow for the year can be calculated as follows

= Sales-costs-taxes.

= $241,000-$103,400-$14,637

= $122,963

Hence the operating cash flow for the year is $122,963

5 0

3 years ago

Imagine an economy in which: (1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goo

Tomtit [17]

<span>Imagine an economy in which:
(1) pieces of paper called yollars are the only thing that buyers give to sellers when they buy goods and services, so it would be common to use, say, 50 yollars to buy a pair of shoes;
(2) prices are posted in terms of yardsticks, so you might walk into a grocery store and see that, today, an apple is worth 2 yardsticks; and
(3) yardsticks disintegrate overnight, so no yardstick has any value for more than 24 hours.

In this economy, the yardstick is a unit of account but it cannot serve as a store of value.</span>

4 0

3 years ago

If a 10% decrease in the price of one product that you buy causes an 8% increase in quantity demanded of that product, will anot

Bad White [126]

Answer:

Explanation:

to determine if another 10% decrease in the price cause another 8% increase (no more and no less) in quantity demanded, we have to determine the price elasticity of demand.

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

8% / 10% = 0.8

demand in inelastic so a 10% reduction in price would lead to a less than 8% change in quantity demanded

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

8 0

3 years ago