Abby is planning on purchasing a ski resort for $23,000,000. It is expected to lose $1,200,000 each year the first four years. An additional $8,000,000 invested at the end of the fourth year will result I a profit of $5,500,000 each year from the fifth year through the fifteenth year. At the end of 15 years the ski area can be sold for $33,000,000. Calculate the ERR when e = 12%.
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- 5. Rearden Metals is considering opening a strip mining operation to provide some of the raw materials needed in producing Rearden metal. The initial purchase of the land and the as- sociated costs of opening up mining operations will cost $100 million today. The mine is expected to generate $30 million worth of ore per year for the next 10 years. In 11 years, when the project is over, Rearden will need to spend $200 million to restore the land to its original pristine natural appearance. Which of the following is FALSE? A) Rearden should only use the NPV rule in this case to determine whether to make this investment. B) Rearden could use either the NPV rule or the IRR rule in this case, and will get the same answer regardless of the cost of capital. C) In this case, the NPV will not necessarily be decreasing in the cost of capital or discount rate used. D) Rearden should not use the payback rule in this example because it is likely to be mis- leading. E) Rearden could make a mistake…1.4) You use RM40,000 of your own money to start a catering business. During the first year you earn a 5% return on that investment. If the current interest rate on savings is 8%, you earn an economic profit of Working Calculation:3. Markland Manufacturing manufactures desk lamps intends to increase capacity by obtaining newequipment. Two vendors have presented proposals. The purchase cost for proposal A is $30,000,and for proposal B, $80,000. Each proposal will produce lamps of the same quality. Proposal Ais expected to produce lamps at $15.00/lamp, while proposal B is significantly more efficient andwill produce them at $10.00/lamp. The revenue generated by the sale of each lamp is $20.00/unit.a. Plot, on the same graph, the lines describing the potential revenue from each proposal.b. What is the break-even point in lamps for proposal A?c. What is the break-even point in lamps for proposal B?d. What is the point of indifference?e. The manufacturer expects to sell 12,000 lamps and has informed the vendors that it has chosen proposal B. The vendor of proposal A has offered to re-negotiate the purchase price of its proposal in order to win
- 2.6 Isabel runs her family's small pineapple processing plant, which takes fresh pineapples and cuts them into pine- apple rings, spears, and chunks. The capital stock of the firm consists of three machines of various vintages, each of which can the pineapples into any of the three different forms. All of the machines are in excellent condi- process tion, and all machines can be running at the same time. Cost of Processing per Pineapple Maximum Total Capacity (Pineapples) per Day Machine 1 $ 0.10 250 Machine 2 0.25 400 Machine 3 0.50 500 a. Assume that “cost of processing" includes all labor and materials, including the owner's wages. Assume further that Isabel's family signed a long-term contract (20 years) with a service company to keep the machines in good repair for a fixed fee of $1,825 per year, or $5 per day. (1) Derive the firm's marginal cost curve. (2) Derive the firm's total cost curve. b. At a price of $0.40, how many pineapples would the company process? What would total…8. Tom borrowed Php500,000 from her parents to open a spa. He pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal Php150,000 and his variable costs equal Php200,000. In her first year, Tom had a total of 2,000 customers at a price of Php300/customer. Tom's total economic profit isMr.Abdullah specializes on Arbitrage trading. He has got the following quotes regarding 3 currencies GBP 0.739541 / USD AUD 1.3081 / USD GBP 0.563789 / AUD Now he wants to use USD 1000000 and make a profit. Answer the following questions based on the data given above. After converting from USD to GBP and from GBP to AUD, How much will he get in converting AUD to USD in the above process? a. 1715879 b. 1002777.804 c. 739541 d. All the options are wrong e. 1311733.645 After converting from USD to GBP, How much will he get in converting GBP to AUD? a. 739541 b. 1002777.804 c. 416945 d. None e. 1311733.645 How much will he get in converting USD 1000000 to GBP? a. 1311733.645 b. 1002777.804 c. None d. 739541 e. 1352190 Which cross rate should he calculate and compare with actual quotes to make sure that he will get profit a. GBP/AUD b. USD/AUD c.…
- Amarks Profiles Tab Window Help b. W G iz/attempt.php?attempt=631086&cmid%3D55726&page=13 tempt ... 0:12:25 n 14 $6.00 $5.50 ed MC $5.00 $4.50 $4.00 $3.50 put of ATC AVC on P= MR $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 25 50 75 100 125 150 Output (Q) The diagram above shows a Perfectly Competitive firm in the short-run. This firm will minimize its loss by choosing the Output (Q)level: Select one: O a. 50 O b. 75 O c. 25 O d. 100 Next page evious page MacBook Air2. September 2019/2020 Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies. (i) Calculate Tim’s accounting profit and economic profit. (ii) “I am not sure if I made the right decision to start this business.” says Tim. Comment on the above statement.How do firms measure their profit? by the sum of total sales revenue by the total value of outstanding shares of stock by subtracting total costs from total revenues O by subtracting total revenues from total costs
- 1. Shelby is an entrepreneur who has decided to open a small advertising firm. She rents office space at a cost of $25,000 per year, she has employed an assistant at a salary of $30,000 per year, and she incurs annual utility and office supply expenses of $20,000. Her best alternative is to work elsewhere and to earn a salary of $50,000 per year. How much annual revenue must her firm receive so that Shelby earns zero economic profit? 2. If a firm's total costs are $100 when 10 units of output are produced and $103 when 11 units of output are produced, the marginal cost of the 11th unit is? 3. Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output during a given day: Nimbus, Inc. Marginal Product Total Cost Average Total Cost Marginal Cost Workers Output 1 2 3 4 20 50 90 120 140 150 155 a. Fill in the column of marginal products. b. A worker costs $100 a day, and the firm has fixed costs of $200. Use this…ЕОС 13.5B Morgan took $400 000 out of their savings account to start an ice cream stand. The savings account paid 5% interest. In the first year, Morgan sold 12,000 batches of ice cream at a price of $3 each, and incurred costs of $12,000 which involved outlays of money. What was Morgan's economic profit in the first year?DQ Saved Не Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate com Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which sells, on average, 55 bottles per week. Meyer's cost is $9 per bottle. Meyer has determined its order cost to be $54 and inventory carrying cost is 20 percent. Meyer is open for business 52 weeks per year. a. What is the EOQ for raspberry syrup? (Round up your answer to the next whole number.) Answer is complete but not entirely correct. EOQ 414 X units b. If Meyer orders the EOQ quantity each time, what will be the inventory turnover rate for raspberry syrup? (Hint Inventory turnover = Annual sales in units / Average inventory in units.) (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Inventory turnover rate 13.82 X times per year Prev. 1 of 3 Next >