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3 years ago

Individual Problems 5-1

Business

1 answer:

Yuliya22 [10]3 years ago

4 0

Answer and Explanation:

The computation is shown below:

1. The break even price per shirt is

Fixed cost per unit t-shirt is

= $24,000 ÷ 8,000

= $3

And,

Variable cost per shirt = $9

So, the break even price per shirt is

= $3 + $9

= $12

Now if George sells 50% more tshirt then total shirt sell is

= 8000 + 0.5 × 8000

= 12000

So,

Fixed cost per shirt is

= $24,000 ÷ 12000

= $2

So,

Breakeven price per shirt will be

= $2 + $9

= $11

2. The present value of the return is

= 30 ÷ 1.25 + 30 ÷ 1.25^2 + 30 ÷ 1.25^3

= 24 + 19.2 + 15.36

= 58.56 < 80

As the present value is lower than the investment made so the investment is not profitable

3. The investment made in human capital with respect to lawyers would be considered as an after investment that hold-up

Therefore this is a true statement

The total cost of the truck is

TC = $2,500,000 + $200,000 + 4Q

And, The total revenue is

TR = PQ

So, the total profit is

TR = PQ - $2,700,000 - 4Q

Now

PQ - $2,700,000 - 4Q = 0

P = $2,700,000 - 4Q ÷ Q

Assume Q = 100000

So,

P = $2,700,000 - 4 × (100,000) ÷ 100,000

= 26

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