Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,300 per month plus $0.10 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.30 per car washed.

The actual operating results for August appear below.

Answer need to be in paragraph

1) Explain and discuss how you think studying for an exam is subject to the Law of Diminishing Returns. You might also throw into the discussion how this relates to opportunity cost and economic choice (marginal cost versus marginal benefit) of how you choose to spend your time.

THIS IS A GOOD POINT, NEAR THE MIDDLE OF THE SEMESTER, TO POINT OUT AGAIN THAT EVERY DISCUSSION REQUIRES AT LEAST A COUPLE OF PARAGRAPHS, AND THAT EVERY DISCUSSION IS BASED ON THE RELEVANT READINGS. THE GOAL IS TO SHOW THAT YOU KNOW HOW TO USE CONCEPTS LEARNED IN THE COURSE. .

2) TIME PERIODS

a.What is the distinction made by economists between the short run and the long run? Why is it important?

b. Cite and explain examples from various sized firms and/or various products  in the garment industry.

3) Implicit and Explicit Costs

(a) Why do economists look at implicit costs?

(b) Look at two businesses (one big and one small) and for each identify what might be their implicit costs. Be specific!

On January 1, 2020 , WXY Inc. replaced the roof on its warehouse. WXY originally built the warehouse and placed it into service on January 1, 1995. The cost of the building was $1,000,000. The building has been depreciated using the straight-line method over an originally estimated 40-year useful life with an estimated salvage value of $50,000. Based on original construction records, WXY is able to calculate that the old roof's cost and accumulated depreciation are 8% of the amounts for the entire building.

The new roof cost $200,000. WXY estimates that the new roof will extend the useful life of the building by 10 years. When the old roof was removed, the old scrap was simply thrown away.

Which of the following statements it true?

On January 1, 2020 , WXY Inc. replaced the roof on its warehouse. WXY originally built the warehouse and placed it into service on January 1, 1995. The cost of the building was $1,000,000. The building has been depreciated using the straight-line method over an originally estimated 40-year useful life with an estimated salvage value of $50,000. Based on original construction records, WXY is able to calculate that the old roof's cost and accumulated depreciation are 8% of the amounts for the entire building.

The new roof cost $200,000. WXY estimates that the new roof will extend the useful life of the building by 10 years. When the old roof was removed, the old scrap was simply thrown away.

Which of the following statements it true?

A community playhouse needs to determine the​ lowest-cost production budget for an upcoming show. They have to determine which set pieces to construction and which to rent. The organization has only two weeks to construct the set. The theater has two carpenters who work up to 12 hours a​ week, each at ​$12 an hour.​ Additionally, the theater has a scenic artist who can work 15 hours per week to paint as needed at ​$14 per hour. The set needs 20 flats​ (walls), two hanging​ drops, and three wooden tables​ (props). The number of hours required for each piece for carpentry and painting is shown below.​ Flats, hanging​ drops, and props can also be rented at a cost of ​$75​, ​$500​, and ​$400 ​each, respectively. How many of each unit should be built by the theater and how many should be rented to minimize total​ cost?

The optimal integer solution is to build __ flat(s) and rent __ ​flat(s); build __hanging​ drop(s) and rent __hanging​ drop(s); build __prop(s) and rent__ prop(s). This solution gives the ▼(minimum, maximum) ​cost, which is ​$__.

We can remodel our existing building at a cost of $6.9 million, or build a new building at a cost of $11 million. The old building, after it is refurbished, would not be as efficient as the new one, and energy costs would, therefore, be $750,000 a year higher. The maintenance cost for the old building would be $450,000 per year and $420,000 for the new building. The salvage value for the new building would be $3.25 million after its 15-year life, while the salvage value for the old building would be $1,800,000 after its 9-year life. In addition, the new building would allow our company to project a “Green Friendly” image that would result in better recruitment of clients and personnel. It is estimated that this “Green Friendly” image would result in cost savings or increased cash flows (after-tax) of $320,000 per year. If the new building is built, the old, the old building can be sold now for $850,000 in its present condition (please read pages 208-209 for the treatment of this cash flow). The required return for Boulder is 8 percent.

Net present value for keeping the old building_____________ Equivalent annuity for keeping the old building_________

Net present value for building a new building____________ Equivalent annuity for building a new building_________

Which option should be chosen? _______________

Marie and Alex just paid $250,000 for a house. They made a down payment of $50,000 and assumed a 30-year $200,000 mortgage with a fixed annual interest rate of 5.50%. The house will serve as a residence for several years, but Marie and Alex also view it as an investment, as property values in the neighborhood are projected to increase at a rate of 5% per year in the near future. Property taxes on their home will be $4,236 the first year and are expected to increase 3% a year. Homeowners insurance will cost $632 the first year and is expected to increase at a rate of 2% each year. The couple plans to sell the house after eight years. Answer the following questions.

What will the couple pay in property taxes over the 8 years?

What will the couple pay in homeowners insurance over the 8 years?

Senior managers at Criterion Products are evaluated in terms of increase in profit. In fiscal 2013, Criterion Products had net operating profit after taxes of $ 2,000,000 and invested capital of $ 20,000,000. In fiscal 2014, the company had net operating profit after taxes of $ 2,500,000 and invested capital of $ 30,000,000. Senior managers at Valcun Products are evaluated in terms of ROI. In fiscal 2013, the ROI was 18 percent while the cost of capital was only 14 percent. Near the end of fiscal 2013, managers had an opportunity to make an investment that would have yielded a return of 16 percent. However, the senior managers did not support the investment Required:

a. Explain why the senior managers at Criterion Products have an incentive to overinvest.

b. Explain why the senior managers at Valcun Products have an incentive to underinvest.

All inventory items are not counted or tagged.

Extension errors are made on the client's inventory summaries.

Purchase received near the balance sheet date may be included in the physical count but may not be booked.

Obsolete and damaged goods are not noticed in the warehouse.

Inventory stored in a public warehouse may not exist.

Client personnel may incorrectly count the inventory.

The lower of cost or market method may be incorrectly applied.

Empty containers or hollow squares may be included in the inventory.

Goods held on consignment may be included as inventory.

Losses on purchase commitments may not be recognized.

a) Identify the substantive test that should detect each error.

b) For each test, indicate the financial statement assertion(s) to which it pertains.

c) Indicate the type of audit procedures used for each substantive test.

Reynaldo and Sonya, a married couple, had flood damage in their home due to a dam break near their home in 2019, which was declared a Federally Designated Disaster Area. The flood damage ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable:

Required:

Their homeowner's insurance policy had a $12,565 deductible for the personal property, which was deducted from their insurance reimbursement of $17,925, resulting in a net payment of $5,360. Their AGI for 2019 was $38,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2019?