The elasticity of supply is defined as the ________ change in quantity supplied divided by the ______

Suppose two successive levels of disposable personal income are $16 and $21 billion, respectively, and the change in consumption

Novay_Z [31]

Answer:

The correct answer is 0.4

Explanation:

Marginal Propensity to consume

21 Billions- 16 Billions = 5 Billions

2 Billion ÷ 5 Billions = 0.4

The MPC will be equal to 0.4

7 0

3 years ago

Best Foods, Inc. has an unlevered cost of capital of 10 percent. The company generates EBIT of $4,250 per year and has a tax rat

avanturin [10]

Answer:

The value of the levered firm $31,125

Explanation:

Value of Firm is the value of present value of expected future earning. It is calculated by dividing the earning after tax by the cost of capital while considering that the business will operate for the foreseeable future time.

EBIT $4,250.00

Less

Interest $0.00

EBT $4,250.00

Tax 35% x 4250 $1,487.50

EAT $2,762.50

Cost of Capial 10%

Value of firm = EAT / Cost of Capital = $2,762.5 / 10% = $27,625

Debt after tax = $10,000 x ( 1 - 0.35 ) = $6,500

Value of Equity = Value of firm - Debt after tax = $27,625 - $6,500 = $21,125

Value of debt = $10,000

Value of levered Firm = $21,125 + $10,000 = $31,125

3 0

4 years ago

Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpe

pochemuha

Solution and Explanation:

Part a:

Revenue 5000 multiply 6.6 33000

Unit Level Variable Cost:

Material Cost 5000 multiply 2.7 -13500

Labor Cost 5000 multiply 1.2 -6000

Manufacturing Cost 5000 multiply 1.2 -6000

Shipping and Handling 5000 multiply 0.3 -1500

Sales Commission 0

Contribution Margin 6000

Should be accepted as it will increase profitability by $6000

Part b1&b2: Cost to Make Cost to Buy

Material Cost 40000*2.7 108000

Labor Cost 40000*1.2 48000

Manufacturing Cost 40000*1.2 48000

Prod Supervisor Salary 72000

Purchase Cost 40000*6.72 0 268800

Total Cost 276000 268800

Should purchase from outside as cost is lower than making it

Part b3:

Cost to Make Cost to Buy

Material Cost 60000 multiply 2.7 162000

Labor Cost 60000 multiply1.2 72000

Manufacturing Cost 60000*1.2 72000

Prod Supervisor Salary 72000 72000

Purchase Cost 60000*6.72 0 403200

Total Cost 378000 475200

Should make in house as cost is lower

Part c: It should not be eliminated.

Elimination will decrease profitability by $72000 which is being allocated company wide facility exp. Before Allocation, actual profit is (168000-24000-72000)=$72000

Loss is because of allocation of facility expenese, which will be allocated on other segment.

5 0

3 years ago

Last year vaughn corp. had sales of $315,000 and a net income of $17,832, and its year-end assets were $210,000. the firm's tota

KATRIN_1 [288]

I have the same question if anyone can help please let me know

4 0

3 years ago

A market that is efficient has which of the following features

iogann1982 [59]

Answer: Option D

Explanation: In financial economics, the effective-market theory is a theory that asset values represent all available data. Strong inference is that this is difficult to reliably "outperform the market" on a threat-adjusted basis because market rates will respond only to new data.

Thus, consumer valuation is always taken into consideration as the prices are determined by the m,market forces which are dependent on consumer valuation.

In such markets resources are allocated to most efficient firms who are capable to make maximum output result.

7 0

4 years ago

The elasticity of supply is defined as the ________ change in quantity supplied divided by the _______ change in price.

The elasticity of supply is defined as the __ change in quantity supplied divided by the _ change in price.