USX is considering adding an additional furnace that will operate for ten years. Last year the company commissioned a feasibility study that cost $1 million. The study came up with the following numbers. The new furnace costs $1,000 million and has a salvage value of $200 million at the end of the ten-year period. Using the new furnace increases sales by $150 million per year and involves operating expenses of $10 million per year. Moreover, working capital requirements increase by $20 million immediately. According to IRS rules the new furnace must be depreciated straight line over eight years. The new furnace will need parts from an old furnace USX already owns. The old furnace is fully depreciated and has a resale value (after-tax) of $30 million. Without the parts, which are no longer manufactured, the old furnace has no resale value. The corporate tax rate is 35% and the cost of capital is 10%. Should USX go ahead with the new furnace?
Answers
Based on the net present value (NPV) which is positive USX should go ahead with the new furnace.
Analysis whether USX should go ahead with the new furnace is as follows:1. Initial investment:
New furnace cost: $1,000 millionIncreased working capital: $20 millionOpportunity cost (loss of resale value for the old furnace): $30 millionTotal initial investment: $1,050 million
2. Annual cash flows:
Increased sales: $150 millionOperating expenses: -$10 millionDepreciation expense (straight line over 8 years): -($1,000 million - $200 million) / 8 = -$100 million per yearTax savings from depreciation: $100 million x 35% = $35 millionNet operating income: $150 million - $10 million = $140 millionTax on net operating income: $140 million x 35% = -$49 millionAfter-tax net operating income: $140 million - $49 million = $91 millionTotal annual cash flow: $91 million + $35 million = $126 million per year
3. Terminal cash flow:
Salvage value: $200 million Return of working capital: $20 millionTotal terminal cash flow: $220 million
4. Now, let's calculate the net present value (NPV) of this project:
NPV = -Initial investment + Sum(Annual cash flow / (1 + cost of capital)^t) + Terminal cash flow / (1 + cost of capital)^10
NPV = -$1,050 million + Sum($126 million / (1 + 10%)^t) + $220 million / (1 + 10%)^10
After calculating the NPV using the provided figures, we find that the NPV is positive (approximately $95 million). Since the NPV is positive, it indicates that the project is expected to generate more value than its cost, and USX should go ahead with the new furnace.
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Related Questions
Blank addresses change depending on the cells you
Blank addresses do not change if you copy them to a different cell.
copy them to.
A1) absolute
A2) mixed
A3) relative
B1) absolute
B2) mixed
B3) relative
Answers
Answer:
absolute addresses change depending on the cells you copy them to.
relative addresses do not change if you copy them to a different cell.
Explanation:
A cell reference is a single cell or range of cells on a Excel worksheet. When calculations are done, these cells can be referred to. The cells are referred to using their row value and column value.
Relative references (or addresses) changes based on the position of rows and columns when a formula is copied to a different cell.
Absolute references (or addresses) do not change (remain constant) even if the formula is copied to a different cell.
In general, business writing should be _____.
Answers
Business writing is important in the business community. The writing style and material must be specific in order to elicit a meaningful reaction and be expressive in nature.
What is a company definition in a nutshell?
A business is described as a company or organisation that engages in commercial, industrial, or professional activity. Companies can be either for-profit or non-profit organisations. Limited liability firms, sole proprietorships, corporations, and partnerships are all examples of business structures. The introduction to the business plan provides a basic summary of the business plan, including a brief company description, aims and objectives, and the reason for launching the firm.
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On Mr. Casper’s debate team at Thunderbird High School, 20% of the members are Sophomores, 35% are Juniors and 45% are Seniors. A team member is selected randomly to give the closing argument for the team. If a sophomore gives the closing argument, the team has a probability of 0. 25 of winning the debate. If a junior gives the closing argument, the probability of winning is 0. 6. If a senior closes, the probability of winning is 0. 85
Answers
Here is a 63.25% for winning the debate given the student distribution and the chance of success of each type of student.
How are probabilities calculated?
Probability computation in mathematics has a wide range of applications. For example, probability may be used to anticipate sales growth or determine the possibility that a specific marketing strategy would be effective in luring in new customers. Mathematical formulae may also be used to determine the likelihood of something happening.
The probability formula determines the likelihood that an event will occur. The equation for calculating an event's probability uses the ratio of favorable outcomes to all other potential outcomes. The range of probabilities is always 0 to 1. The following is a representation of the general probability equation:
The ratio of favorable outcomes to all other outcomes is used to determine probability.
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During 2022, its first year of operations, Natty Greene's
Corporation issued 500,000 shares of $2 par value common stock and
40,000 shares of $4 par value preferred
stock. No other additional shares h
Answers
Natty Greene's Corporation raised $1,160,000 in equity through the issuance of common and preferred stock during its first year of operations in 2022.
What is the significance of the issuance of common and preferred stock by Natty Greene's Corporation?To calculate the total equity raised by Natty Greene's Corporation during its first year of operations in 2022, we can multiply the number of shares issued by their respective par values and sum the amounts.
For common stock:
Number of common shares issued = 500,000
Par value per common share = $2
Total value of common stock = Number of common shares issued × Par value per common share
= 500,000 shares × $2
= $1,000,000
For preferred stock:
Number of preferred shares issued = 40,000
Par value per preferred share = $4
Total value of preferred stock = Number of preferred shares issued × Par value per preferred share
= 40,000 shares × $4
= $160,000
Therefore, the total equity raised by Natty Greene's Corporation in its first year of operations is the sum of the common stock value and the preferred stock value:
Total equity raised = Total value of common stock + Total value of preferred stock
= $1,000,000 + $160,000
= $1,160,000
Thus, Natty Greene's Corporation raised $1,160,000
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Alicia is conducting research on consumer behavior. The study requires her to note the number of people who shop at Fresnas Mart, a grocery store, in the afternoons during weekdays. She also needs to pay attention to the customers' preferred brands, the customer service, and the arrangement of items in the store. She needs to conduct the study without interacting with the customers so that she does not influence their behavior and choices. In this scenario, Alicia is conducting a(n) _____.
Answers
Answer:
Observational study.
Explanation:
In Statistics, sampling can be defined as a process used to collect or select data (objects, observations, or individuals) from a larger statistical population using specific procedures.
There are various types of sampling used by researchers and these are;
1. Random sampling.
2. Systematic sampling.
3. Stratified sampling.
4. Cluster sampling.
5. Opportunity or convenience sampling.
An observational study can be defined as a type of study in which a researcher observes and measures the effect of a diagnostic test, risk factors, or treatments on individuals without intervening, changing or manipulating who are or aren't exposed to it (controlled conditions).
In this scenario, Alicia is conducting an observational study because the study was required to be conducted without interacting with the customers so as to avoid influencing their behavior and choices.
why identifying ethical standards is hard
Answers
There are multiple ethical standards and different people may have different views and interpretations of what is ethical, making it challenging to reach a consensus.
Identifying ethical standards can be difficult for several reasons. Firstly, ethical standards vary across cultures and can be influenced by various factors such as religion, politics, and social norms. What is considered ethical in one culture may not be viewed the same way in another culture.
Secondly, there can be a lack of consensus on what constitutes ethical behavior in a particular field or industry. This can be due to differences in opinion, conflicting interests, and the complexity of the issues involved.
Additionally, ethical dilemmas often involve a trade-off between conflicting values, and it can be challenging to strike a balance between them. For instance, a company may have to choose between maximizing profits and protecting the environment or treating employees fairly.
Finally, individuals may have different ethical perspectives based on their personal beliefs, experiences, and values. This can make it difficult to reach a consensus on what is ethical, and what is not.
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Only one firm produces and sells San Francisco Giants baseball hats in the country of NoDodgers, and as the story begins, international trade in baseball hats is prohibited. The equations that describe the monopolist's demand, marginal revenue, total cost, and marginal cost are given by - Demand: P=10−Q. - Marginal revenue: MR=10−2Q. - Total cost: TC=3+Q+ 2
1
Q 2
. - Marginal cost: MC=1+Q. The monopolist produces baseball hats, which are sold at a price of $ per hat. The monopolist's profit is $
Answers
The monopolist's profit is $12.88 per hat in NoDodgers.
The monopolist in this case has the monopoly power to influence the price of the San Francisco Giants baseball hats sold in NoDodgers. Therefore, the monopolist's demand is derived from the market demand for baseball hats in NoDodgers. Thus, the demand equation is P=10−Q, where P is the price of the hat, and Q is the number of baseball hats produced and sold by the monopolist.The marginal revenue equation is MR=10−2Q. The monopolist's total cost of producing baseball hats is TC=3+Q+ 21 Q 2, and the marginal cost of producing each baseball hat is MC=1+Q. The monopolist's profit, denoted as Π, is determined by the difference between total revenue and total cost. Thus, Π=TR−TC, where TR is total revenue derived from the sale of baseball hats.
Total revenue is given by the product of price and quantity, which is TR=P×Q.The monopolist maximizes profit by equating marginal revenue to marginal cost. Thus, MR=MC=10−2Q=1+Q. Solving for Q, we get Q=3.5. Substituting Q into the demand equation, we get P=10−3.5=6.5. Hence, the monopolist's profit is Π=TR−TC=P×Q−(3+Q+ 21 Q 2)=6.5×3.5−(3+3.5+ 21 3.5 2)=12.88.
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Question 26 Listen A manufacturer is considering a switch from manufacturers' representatives to an internal sales force. The following cost estimates are available. Manufacturers' reps are paid 7.9% commission and incur $645,000 in fixed costs, while an internal sales force has fixed costs projected at $2,080,000 and would receive 3.0% commission. At what sales volume would the manufacturer be indifferent between the two alternatives? Report your answer in dollars. Your Answer: Answer Question 27 4) Listen ► A manufacturer is considering a switch from manufacturers' representatives to an internal sales force. The following cost estimates are available. Manufacturers' reps are paid 8.8% commission and incur $600,000 in fixed costs, while an internal sales force has fixed costs projected at $1,750,000 and would receive 3.3 % commission. Assume that sales revenue is double the breakeven volume or the point at which the manufacturer would be indifference between reps and an internal sales force. At this volume, how much would the manufacturer save, assuming the company had switched to an internal sales force? Report your answer in dollars. Your Answer:
Answers
The manufacturer would be indifferent between manufacturers' representatives and an internal sales force at a sales volume of approximately $29,285,714.29. The savings achieved by switching to an internal sales force at double the breakeven volume can be calculated using the provided cost estimates.
To determine the sales volume at which the manufacturer would be indifferent between manufacturers' representatives and an internal sales force, we need to equate the costs of both options.
For the manufacturers' representatives:
Total cost = Commission + Fixed costs
Total cost = 7.9% of sales + $645,000
For the internal sales force:
Total cost = Commission + Fixed costs
Total cost = 3.0% of sales + $2,080,000
To find the sales volume, we set the total costs of both options equal to each other:
7.9% of sales + $645,000 = 3.0% of sales + $2,080,000
Subtracting 3.0% of sales from both sides gives:
4.9% of sales + $645,000 = $2,080,000
Subtracting $645,000 from both sides gives:
4.9% of sales = $2,080,000 - $645,000
4.9% of sales = $1,435,000
Dividing both sides by 4.9% gives:
sales = $1,435,000 / 4.9%
sales ≈ $29,285,714.29
Therefore, the manufacturer would be indifferent between manufacturers' representatives and an internal sales force at a sales volume of approximately $29,285,714.29.
For the second question, we need to find the savings achieved by switching to an internal sales force at double the breakeven volume.
Assuming the breakeven volume is the sales volume at which the manufacturer would be indifferent, which is $29,285,714.29, we can calculate the savings.
Savings = Total cost with manufacturers' reps - Total cost with internal sales force
Savings = (8.8% of sales + $600,000) - (3.3% of sales + $1,750,000)
At the breakeven volume, the sales would be $29,285,714.29:
Savings = (8.8% of $29,285,714.29 + $600,000) - (3.3% of $29,285,714.29 + $1,750,000)
Calculating this equation will give the amount saved by switching to an internal sales force.
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An innovative business idea that no one has never had
Answers
An innovative business idea that no one has never had is Offering virtual assistance to other businesses.
What is innovative business idea ?innovative business idea can be described as an idea in business that cn be developed so that it can be a way to earn a living by providing the services or the goods to the consumer.
It should be noted that this innovation can be the one that no one has ever done or the modification of the one that has been in exisitence, however providing the virtual assistance serves as one of the innovation in business that can ring profit.
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Complete question:
State An innovative business idea that no one has never had
You need a new computer, and you will need a loan in order to buy one. Which lender is most likely to charge you the highest interest rate on your loan?
A. finance company
B. savings and loan association
C. credit union
D. savings bank
Answers
hope this helps!! <3
Savings and loan association is the lender is most likely to charge you the highest interest rate on your loan. Hence, option B is correct.
What is the main purpose of a savings and loan association?Building Societies or Savings and Loan Associations perform the same fundamental duties by gathering funds from the general public and using those savings to fund mortgage loans for residential real estate.
The S&L crisis may have caused the banking sector to collapse with the greatest degree since the Great Depression. By 1989, more than 1,000 S&Ls had failed nationwide, thus destroying one of the most reliable sources of house mortgages.
In that they provide many of the same services, including banking and mortgage financing, savings and loan associations function similarly to banks and credit unions. Savings and loan organizations, however, prioritize savings and mortgages more.
Thus, option B is correct.
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Why might a marketer choose Internet advertising over television advertising?
A. Because Internet advertising is more expensive
B. Because the Internet has been around longer than television
C. Because television only reaches people over the age of 50
D. Because television advertising is more expensive
Answers
Answer:
D. Because television advertising is more expensive
Explanation:
Advertisement on the TV involves making a video that has to be of specified standards. Making the video is costly. After making the video, a company has to buys advertising time with media houses which, is also expensive.
Online or internet advertising is cost-effective. Many popular social media sites allow users to post advertisement messages for free.
In an oral agreement, Chris offers to sell Marcy his car for $13,000, but Marcy is confused and thinks Chris said $15,000.
As they continue their negotiations, Chris becomes aware that Marcy thinks he said $15,000 instead of $13,000, and
when Marcy agrees to pay the additional $2,000, Chris doesn't say anything. Is the contract going to be upheld? True false
Answers
Answer: The answer is no.
a. How many more people were working in agri-
cultural jobs in the traditional economy than in
the market economy?
Answers
In the traditional economy there were hundreds more people working than in the market economy
The market economy is an economic term characterized by:
A system of economic relations based on sale and exchangeThe state does not play a decisive role and in which decisions are made by each economic entity independentlyA market economy is characterized by private propertyOn the other hand, the traditional economy is characterized by:
They are based on traditional economic activities such as agriculture and harvestingFocuses on survivalHas a reduced economic surplusAccording to the above, in a traditional economic system, more people are working in agriculture than in the market economy because the market economy is based on industrial production and exchange.
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Which is a disadvantage of withdrawing more money than is available in a checking
account?
a) late payment fee
b) overdraft fee
c) interest fee
FIRST ANSWER GETS BRAINLIEST
Answers
Answer: Your answer is B. Overdraft fee
Explanation:
B. Overdraft fee
May I have brainliest please? :)
50. Among the characteristics of the "learning organization" can be included all the following except:
A. shared vision.
B. systems thinking.
C. personal mastery.
D. team learning.
E. authoritative bureaucratic structure.
Answers
E. authoritative bureaucratic structure is not a characteristic of the "learning organization."
Among the characteristics of the "learning organization," all the following can be included except E.'s authoritative bureaucratic structure. A learning organization typically emphasizes a shared vision, systems thinking, personal mastery, and team learning, while an authoritative bureaucratic structure does not align with the collaborative and adaptive nature of a learning organization.
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what is farmer brown's profit-maximizing level of output?
Answers
To maximize profits, a farmer typically aims to find the level of output where marginal revenue (MR) equals marginal cost (MC).
Marginal revenue refers to the additional revenue generated from selling one more unit of output, while marginal cost refers to the additional cost incurred in producing one more unit.
To find the profit-maximizing level of output, Farmer Brown would need to compare the marginal revenue and marginal cost at different levels of production. As long as the marginal revenue exceeds the marginal cost, it would be beneficial to increase the level of output.
If the marginal cost exceeds the marginal revenue, it would be advisable to decrease the level of output. Other factors like market demand, input costs, and economies of scale should be taken into account. These factors can influence the overall profitability and may require further analysis to determine the precise profit-maximizing level of output for Farmer Brown.
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in which situations would a firm be most likely to use persuasive advertising? (choose every correct answer.) multiple select question. a brand that the firm wishes to reposition a product category where competition is not yet established a product category where competition is intense a product category in the growth or early maturity stage of the product life cycle
Answers
Answer: A product category in the growth or early maturity stage of the product life cycle
In launching a new product or service in an attempt to increase market share, changing consumer attitudes and behaviours, there would be more chances for firms to employ convincing advertising. Such advertising shall be aimed at convincing consumers that a particular product or brand is superior to its competitors and therefore encourages them to take action, such as purchasing it or visiting the store.
You get six chances to guess the country. Each continent has the following number of countries:
Africa Europe Australia/Oceania The Americas Asia
60 52 29 57 50
What is the probability that someone who solved it in 4 guesses had the wrong continent on the first guess but the right one on the following 3 guesses?
Answers
The probability that someone who completed the puzzle in four attempts used the incorrect continent on the first attempt but the correct one on the next three attempts is 5/1296.
In order to resolve this issue, we must determine the likelihood that the first guess will be incorrect and the subsequent three guesses will be correct.
Step 1: Determine the likelihood of choosing the incorrect continent on the first try.
There are a total of six continents. Given that there are 5 erroneous and 1 accurate continent, the probability of choosing the incorrect one is (5/6).
Step 2: Determine the likelihood that the second, third, and fourth guesses will correctly identify the continent.
The right continent was identified on the second try, so
Since the correct continent has been guessed on the second try, the probability of guessing the right continent on the second, third, and fourth guesses is (1/6) for each guess.
Step 3: Multiply the probabilities from steps 1 and 2.
(5/6) * (1/6) * (1/6) * (1/6) = 5/1296
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when it comes to advertising, food companies are following in the footsteps of the blank companies.
Answers
The comparison suggests that food companies are emulating some of the questionable marketing practices and strategies that were previously associated with tobacco companies.
When it comes to advertising, food companies are following in the footsteps of the tobacco companies.
Tobacco companies have historically been known for their aggressive and deceptive advertising practices, especially in promoting their products to target vulnerable populations, including children and teenagers. However, due to increased regulations and public awareness about the harmful effects of tobacco, advertising by tobacco companies has become more restricted and heavily scrutinized.
Food companies, particularly those in the fast food and processed food industries, have been observed to adopt similar marketing strategies as tobacco companies once employed.
They often employ tactics to create a strong brand presence, appeal to emotions, and target specific demographics, including children and young adults. Additionally, they have faced criticism for promoting unhealthy food choices and contributing to the rise of obesity and related health issues.
The comparison suggests that food companies are emulating some of the questionable marketing practices and strategies that were previously associated with tobacco companies.
This parallel underscore the need for increased scrutiny, regulation, and public awareness regarding the marketing and advertising practices employed by the food industry to protect consumers' health and well-being.
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A girl got an umbrella to take outside.why didn't she get wet
Answers
The owner of a landscaping business has noticed that none of his competitors are including ponds or other water features in the gardens they create. The landscaper wants to determine the viability of this business opportunity What should this entrepreneur do FIRST before offering to design and build water features as part of his landscaping business? оооо
Contact the water department to see if they can support the extra demand for water.
Ask the customers in the area if they are interested in adding a water feature to their gardens.
Determine if there is a supply chain available. Perform a financial audit to determine if there is
enough money available to add the new service.
Answers
What the entrepreneur should do FIRST before offering to design and build water features as part of his landscaping business is: Ask the customers in the area if they are interested in adding a water feature to their gardens.
LandscapingSince none of his competitors are including ponds or other water features in their gardens.
When determining the viability of the business opportunity the first step is for the owner of the landscaping business to all ask the customers in the area whether they are interested in adding a water features to their garden.
Inconclusion what the entrepreneur should do FIRST before offering to design and build water features as part of his landscaping business is: Ask the customers in the area if they are interested in adding a water feature to their gardens.
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Answer:
Ask the customers in the area if they are interested in adding a water feature to their gardens...
Explanation:
Is empathy matters in making friends and relationships Why?
Answers
The truth is that empathy makes people happier because it helps life feel more meaningful. Because they can see things from another person's point of view, they're more able to make and keep friends.
Empathy is the ability to put oneself in another person's shoes and comprehend or experience what they are going through from within their frame of reference. Since term was first used in the English language, scholars and laypeople have given empathy a broad variety of meanings.
Definitions of empathy cover a wide variety of behaviors, such as having compassion for others and a desire to assist them, feeling feelings similar to those of another person, understanding what another person is thinking or feeling, and blurring the lines between oneself and others.
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A consumer who is willing to pay more for a pre-assembled piece of furniture as opposed to a cheaper piece of furniture that has to be put together after purchase recognizes the item’s
A: Real value
B: Perceived value
C: Form utility
D: Possession utility
Answers
The consumer's willingness to pay more for a pre-assembled piece of furniture rather than a cheaper piece that requires assembly recognizes the item's B: Perceived value.
Perceived value refers to the subjective assessment of a product's worth or utility based on an individual's perception and preferences. It represents the consumer's belief in the benefits and value they expect to receive from a product or service. In the given scenario, the consumer's willingness to pay more for a pre-assembled piece of furniture indicates that they perceive higher value in the convenience and ease of having the furniture already assembled.
A. Real value:
Real value typically refers to the objective or intrinsic value of a product, often determined by its features, specifications, and tangible attributes. While the consumer may recognize the real value of the pre-assembled furniture in terms of its convenience and time-saving aspect, the question specifically asks about the consumer's perception, indicating that perceived value is a more suitable answer.
C. Form utility:
Form utility refers to the value added to a product by changing its physical form or enhancing its appearance to better satisfy consumer needs or preferences. While pre-assembled furniture may offer improved form utility in terms of ready-to-use convenience, the question focuses on the consumer's perception rather than the product's physical attributes.
D. Possession utility:
Possession utility refers to the value created by making a product easily accessible and available to consumers when and where they desire it. While pre-assembled furniture may provide possession utility by being readily available for immediate use, the question emphasizes the consumer's willingness to pay more, indicating that it is their perception of value that is being addressed.
the consumer's willingness to pay more for a pre-assembled piece of furniture indicates that they perceive higher value in its convenience and ease of use. This recognition of value aligns with the concept of perceived value, making option B, "Perceived value," the most appropriate choice in this scenario.
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Coronado Industries uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2019 totaled $18000 of materials, $13000 of direct labor costs, and $8000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $12000, and the ending balance is $9000. During the year, the company completed 25 machines. How much is the cost per machine
Answers
Answer:
Cost per machine $1,680
Explanation:
The computation of the cost of the machine is given below:
Beginning work in process $12,000
Direct material $18,000
Direct labor $13,000
Overhead $8000
Less: Ending work in process -$9,000
Cost of goods manufactured $42,000
Divided by Unit 25
Cost per machine $1,680
hence,the same should be relevant
What’s the best answers
Answers
What safety device should be worn when there is danger of fragments being thrown?
Answers
Answer:
gloves i think
Explanation:
What types of objects can be produced by recycling the waste materials ?
Answers
Answer:
plastic, paper products, metal, glass
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is and his marginal benefit from an additional slice of pizza is . If the price of a soft drink is and the price of a slice of pizza is , is Charley maximizing his total benefits? A. No, he should increase his consumption of both goods. B. No, he should shift consumption toward and away from to maximize total benefits. C. Yes, there is no other consumption choice that will make his total benefits greater. D. No, he should shift consumption toward and away from to maximize total benefits.'
Answers
Answer:
The correct option is B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
Explanation:
Note: This question is not complete because some important figures and points are missing in it. These figures and points are therefore provided to complete the question before answering it as follows:
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $100 and his marginal benefit from an additional slice of pizza is $110. If the price of a soft drink is $2 and the price of a slice of pizza is $3, is Charley maximizing his total benefits?
A. No, he should increase his consumption of both goods.
B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
C. Yes, there is no other consumption choice that will make his total benefits greater.
D. No, he should shift consumption toward pizza and away from soft drinks to maximize total benefits.'
The explanation of the answer is now provided as follows:
Under utility maximization theory, the condition for the utility or benefit maximization for two goods is as follows:
MBs / Ps = MBp / Pp ……………………………. (1)
Where:
MBs = Marginal benefit from an additional soft drink = $100
MBp = Marginal benefit from an additional slice of pizza =$110
Ps = Price of a soft drink = $2
Pp = Price of a slice of pizza = $3
Subtitling the relevant values, we have:
MBs / Ps = Marginal utility per dollar spent on soft drinks = $100 / $2 = 50
MBp / Pp = Marginal utility per dollar spent on soft pizza = $110 / $3 = 36.67
This implies that 50 = MBs / Ps > MBp / Pp = 36.67
The decision rule is that the limited money income should be spent by a consumer on the good which gives the higher marginal utility per dollar in order to maximize marginal benefit.
Since 50 = MBs / Ps > MBp / Pp = 36.67 above, this implies that Charley is NOT maximizing his total benefits. To maximize his total benefits, Charley should consume more of soft drinks and less of pizza until the condition is consistent with equation (1).
Therefore, the correct option is B. No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
9. If you found that you were in financial trouble because of credit and had great difficulty paying your monthly bills, what would you do?
Answers
Answer:
You would have to cut down on some luxuries, like lots of foods, amusement parks, shopping trips, etc. If you have have extra hours, work more hours, quite possibly take another job.
Explanation:
Determine if each scenario is good credit or bad credit.
A FICO credit score of 800.
Always paying a late fee on monthly bills.
Closing all unused accounts.
✓ Not using all of the credit available on your credit cards.
SUBMIT ANSWER
O ASK FOR HELP
Answers
1) unsure
2) bad
3) good
4) good
but im PRETTY sure the first one is bad.. IM NOT SURE!!