Answer: c. Ten years, because maintenance costs don't increase.
Explanation:
With the maintenance costs constant at $24,000 a year, the machine is still expected to go 10 years before it's x-ray source is depleted and it has to be scrapped.
This means that the useful life is therefore 10 years because the maintenance cost will not increase but will still keep the machine going for 10 years.
Answer:
Patriots net income for the year = $245,000
Explanation:
Data provided in the question:
Revenue of Patriot Partners during the year = $245,000
Expenses of Patriot Partners during the year = $120,000
Declared dividends by Patriot Partners = $40,000
Now,
The Patriots net income for the year will be
= Revenue of Patriot Partners - Expenses of Patriot Partners
or
Patriots net income for the year = $245,000 - $120,000
or
Patriots net income for the year = $125,000
Answer:
The break-even point in units will increase by 400 units.
Explanation:
Giving the following information:
Fixed costs= $60,000
Selling price= $4.00
Unitary variable cost= $1
First, we need to calculate the current break-even point for the current situation.
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 6,000 / (4 - 1)
Break-even point in units= 2,000 units
<u>Now, the unitary variable cost is $1.5</u>
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Break-even point in units= 6,000 / (4 - 1.5)
Break-even point in units= 2,400 units
The break-even point in units will increase by 400 units.
Answer:
1. Demand would REMAIN THE SAME.
Demand would not change as we are told that demand is relatively inelastic.
2. Supply of oranges will DECREASE.
The hurricane destroyed half of the orange crop. This means that there will be less oranges to sell in the market so the supply will reduce.
3. Market Price of Oranges will RISE
With the supply decreasing and the demand remaining the same, the supply curve will shift left and the new equilibrium will be a higher market price to account for the scarcity.
4. Market Quantity will DECREASE
As the supply to the market decrease, the Quantity available in the market will decrease as well.
5. Total Revenue will RISE.
When market prices rise for a commodity with inelastic demand, total revenue will invariably rise.