Answer:
$39,345,664.93
Explanation:
The computation of the company worth today is as follows:
Present value of revenues after tax is
= $3,700,000 × 1.46 × (1 - 0.25) ÷ (0.07 - 0.018)
= $77,913,461.54
And, Present value of costs after tax is
= $3,700,000 × 0.82 × (1 -0.25) ÷ (0.07-0.011)
= $38,567,796.61
So, the company worth today is
= $77,913,461.54 - $38,567,796.61
= $39,345,664.93
Answer:
Manufacturing Cost = 94,100
Explanation:
Given that,
Direct materials used = $ 20,500
Direct labor used = 26,000
Factory overhead = 47,600
Beginning work in process = 12,200
Ending work in process = 12,800
Manufacturing Cost = Direct Material + Direct Labor + Factory Overhead
Manufacturing Cost = $20,500 + 26,000 + 47,600
Manufacturing Cost = 94,100
Answer:
Explanation:
When the Peso depreciates by 30%, the firm can save money on the costs of production as the inputs would be less costly but the market for the firm in Mexico would be affected negatively as the depreciation of the peso would mean that now, the consumer can buy more goods with the same amount of money which will increase the demand. The loans that the subsidiary has taken would also be affected as it has to pay more for the collateral.
If the company reduces the inventory and stock the foreign receivables before the depreciation occurs to minimize the loss. Before the depreciation happens, the firm can convert the pesos denomination to the dollar so that its value doesn't fall.
Answer:
Charlie consumes 100 books and 25 wines at pareto-optimal allocation, is the right answer.
Explanation:
According to the question, book is denoted with b whereas, wine is denoted with w.
The Utility function of Martha is- 
The Utility function for Charlie is- 
= $1 : 
= $4
At pareto-optimality,
The budget constraint,
Therefore, it may be said that Charlie must consume 100 books and 25 wine at pareto-optimal allocation.
Answer:
has less of an effect on aggregate demand than if households view it as permanent
Explanation:
Tax Cut is an expansionary fiscal policy; where government uses its expenditure, receipt policy to increase aggregate demand.
A tax cut affects aggregate demand by increasing it, as it increases the disposable income & purchasing power. However: if households view a tax cut as temporary, it has less impact then that if it is viewed as permanent.
Such because, a tax cut considered temporary would be seen as a temporary increase in disposable income, purchasing power. However, consumers usually weigh marginal utility of a money unit gained less than marginal disutility of a money unit lost. Simply, increasing standard of living is easier, but degrading even temporarily improvised standard of living again is difficult. So, Consumers are averse to reduce their once raisen standard of living . This would make them change their aggregate demand less firstly itself, if the tax cut is considered to be temporary (to avoid disutility of degraded standard of living after tax cut reversal).
