Answer:
Per Unit specific tax = $3 : Increases price paid by buyers by $3 (if demand is perfectly inelastic) <u>OR</u> Doesn't change buyers' paid price (if supply is perfectly inelastic) <u>OR</u> Partially increases price by <$3 (based on relative demand & supply inelasticity)
Explanation:
Indirect taxes (eg-specific per unit tax) is an example of tax whose incidence & impact fall on different people , burden can be shifted from sellers to buyers .
However burden of a per unit tax is beared by consumers or producers more, depends on relative inelasticity of demand and supply .
If demand is more inelastic , more tax burden is shifted to buyers & if supply is more inelastic , more tax burden is beared by the seller itself .
Reason : Because Elasticity is the responsiveness of buyers demand & sellers supply to product price , more burden is shifted to the economic agent (buyers / sellers) who are less sensitive / more insensitive to change in price for their demand / supply
Answer:
The evaluation criteria used in economic analysis is:
d. Financial units (dollars or other currency)
Explanation:
The evaluation criteria for economic analysis is usually based on financial units, which are national currencies. They represent the monetary values of the elements of any economic analysis. For instance, to ascertain the profitability or otherwise of a transaction, the sales value is compared to the costs. The excess of the sales value over the costs is regarded as the profit. The reverse is regarded as the loss. The evaluation criteria for these two economic analysis is based on the financial units of sales and costs expressed as national currencies.
Answer:
The project to accept is:
e. E
Explanation:
a) Data and Calculations:
Cost of capital = 10%
Mutually Exclusive Projects:
A B C E
Payback (years) 1 5 2 5
IRR 18% 20% 20% 12%
NPV (Millions) $40 $75 $35 $100
b) Project E should be preferred over all the other projects. It has the highest net present value (NPV) and its internal rate of return (IRR) is above the company's cost of capital. It surpasses projects A, B, and C in financial performance terms using time-value of money analysis.
Answer:
d. 301,000
Explanation:
Given that the cost per textbook is $27, we know that the addition of variable and fixed Cost gives total cost.
We will multiply variable cost per textbook of $20 with current volume of book sold per year 43,000, which gives a total variable cost of $860,000.
Also, total cost would be 43,000 multiplied with $27 , which is $1,161,000 minus the total variable cost of $860,000 equals $301,000 which is the associated fixed cost.
A barrier to entry is any factor that makes it difficult for a new firm to enter a market.
