A group of medical professionals is considering the construction of a private clinic. If the medical demand is high (i.e., there is a favorable market for the clinic), the physicians could realize a net profit of $100,000. If the market is not favorable, they could lose $40,000. Of course, they don’t have to proceed at all, in which case there is no cost. In the absence of any market data, the best the physicians can guess is that there is a 50–50 chance the clinic will be successful.

Please write a paragraph of 5-7 well-developed sentences responding to the following short-answer prompt:

The price of gasoline and tolls or of mass transportation is one of the top concerns of young and old alike in today’s world. It especially hits students hard as they travel back and forth from school and work. What are some of the steps a student can take to ease the burden of this cost?

Make sure that you include a topic sentence and specific details and/or illustrations. When you are finished with the context, edit for grammar and syntax so that your full intended meaning comes through. Pay close attention to sentence structure and verb use, and try to combine choppy thoughts and sentences using compound and complex construction.

Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $170,000. Variable processing costs are estimated to be $5 per book. The publisher plans to sell single-user access to the book for $45.

Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 - 6p, where p is the price of the e-book.

B. Use Goal Seek to calculate the price that results in breakeven. If required, round your answer to two decimal places.

Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46.

a.) Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3500 copies?

b.) Use a data table to vary demand from 1000 to 6000 in increments of 200 to assess the sensitivity of profit to demand.

c.) Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3500 copies.

A construction company needs enough money to purchase a new tractor-trailer in 6 years at a cost of $450,000.

If the company sets aside $175,000 in year 2, $125,000 in year 3, and $75,000 in year 4, how much will the company have to set aside in year 5 to have the money needed in year 6?

Assume investments earn 8% per year compounded semi-annually.

What is the value of the individual cash flow at year = 1?

What semi-annual interest rate do you use to solve for the unknown cash flow in year 5?

What is the numerical value for the amount of funding the company have to set aside in year 5 to have the money needed in year 6?

On January 1, 2021, the company obtained a $3 million loan with a 12% interest rate. The building was completed on September 30, 2022. Expenditures on the project were as follows:

On January 1, 2021, the company obtained a $3 million construction loan with a 12% interest rate. Assume the $3 million loan is not specifically tied to construction of the building. The loan was outstanding all of 2021 and 2022. The company’s other interest-bearing debt included two long-term notes of $4,600,000 and $6,600,000 with interest rates of 6% and 8%, respectively. Both notes were outstanding during all of 2021 and 2022. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2021 and 2022 income statements.

Question

1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the weighted-average method and interest expense that will appear in the 2021 and 2022 income statements. ("Round "Weighted-average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Round your answers to the nearest whole dollar.

2. What is the total cost of the building? ("Round "Weighted-average rate of all debt" to 2 decimal places but do not round other intermediate calculations. Round your answer to the nearest whole dollar.)

Roger and Zoë spend their vacation time at a nice cottage that they own in the countryside. Farmer Torti lives next door and normally lets his twelve sheep graze in his field. The sheep eat so quickly that it causes them to burp loudly, a very disruptive sound for Roger and Zoë vacationing next door. Torti is willing to remove sheep from the field when Roger and Zoë are there, but his marginal cost of doing so is $1 for the first sheep he removes, $2 for the second sheep, $3 for the third, etc. Roger and Zoë derive a (combined) marginal benefit of $12 for the first sheep Torti removes, $11 for the second sheep he removes, $10 for the third sheep he removes, etc.

a. Calculate the efficient number of sheep in the field if Roger and Zoë stay at the cottage.

b. Calculate the maximum amount Roger and Zoë would be willing to pay Torti to reduce his sheep to the efficient number.

c. Calculate the minimum amount Torti would be willing to accept to reduce his sheep to the efficient number

d. Calculate the range of prices per sheep that Roger and Zoë could pay Torti to achieve the efficient number.

A sound barrier built between the two properties could block 50 percent of the burping sound.

e. Calculate the efficient number of sheep in the field if there were a sound barrier and if Roger and Zoë stay at the cottage.

f. Calculate the total benefit to Roger and Zoë if the sound barrier were there and the corresponding efficient number of sheep were in the field.

g. Calculate the total cost to Torti if the sound barrier were there and the corresponding efficient number of sheep were in the field.

h. Calculate the maximum amount Roger and Zoë would be willing to contribute to the construction of the sound barrier.

i. Calculate the maximum amount Torti would be willing to contribute to the construction of the sound barrier.

The city of Seattle sells an average of 30,000 hotel rooms per night. Currently, those rooms have an average tax of $90. The city proposed an additional tax of $10 per room to help finance a stadium. Economists believe that without the tax, the city would average an extra 4000 rooms per night due to the new stadium. But with the tax, the number of rooms sold would fall to 27,000 even with the stadium. Based on these numbers, would it be smarter for the city to charge the proposed tax, or to use tax incremental financing to pay for the stadium?