Chapter 6 Problem A consumer finds only three products, X, Y, and Z, are for sale. The amount of utility which their consumption will yield is shown in the table below. Assume that the prices of X, Y, and Z are $10, $2, and $8, respectively, and that the consumer has an income of $74 to spend. Product X (Price $10) Product Y (Price $2) Product Z (Price $8) Quantity Utility Marginal Utility per $ Quantity Utility Marginal Utility per $ Quantity Utility Marginal Utility per $ 1 42 1 14 1 32 2 82 2 26 2 60 3 118 3 36 3 84 4 148 4 44 4 100 5 170 5 50 5 110 6 182 6 54 6 116 7 182 7 56.4 7 120 (a) Complete the table by computing the marginal utility per dollar for successive units of X, Y, and Z to one or two decimal places. Remember the marginal utility per dollar would be calculated by first getting the marginal utility which is the change in utility as quantity increases and then dividing it by the price. When doing Quantity 1 you are going from 0 units to 1 unit. The utility for 0 units would be $0. (b) How many units of X, Y, and Z will the consumer buy when maximizing utility and spending all income? Show this result using the utility maximization formula. (Meaning they need to spend all of their income of $74) (c) Why would the consumer not be maximizing utility by purchasing 2 units of X, 4 units of Y, and 1 unit of Z?

A Company is evaluating the idea of invest $180,000 in a machine and $20,000 in others initial costs. In the first year the company will have $100,000 revenue. In the second and third year the revenues are going to increase 10% per year. Calculate discount payback period. (Discount rate 20%)

Company is Amazon

Short Description of Business: What does the company do? What are its key sources of revenue?

Product Mix: Identify the company’s product mix or key segments. Briefly describe each product line/segment. Include brand names if possible

A company is considering using the compound interest method of depreciation for a piece of equipment costing $100,000, having an estimated AATCF in year one of $25,000, and an estimated IRR of 27% which positively compares to the target rate of return of 12%. The compound interest method of depreciation that would be reported for year one would be:

Group of answer choices

$13,000 positive

$13,000 negative

$2,000 negative

$2,000 positive

Shore Company reports the following information regarding its production cost.

Compute product cost per unit under absorption costing.

Multiple Choice

$62.00

$65.29

$53.00

$26.00

$27.00

Assume that you are working at a manufacturing company and trying to decide between the following two projects:

Q1. If the cost of capital is 8%, use the incremental IRR rule to make the decision.

Q2. If the cost of capital is the same as the Q1, determine the NPV of each project.

Samson Trust Company operate two departments (Annuity and Insurance). The company incurs estimated computer service costs of 272000 each year. Samson Trust Company wants to allocate the annual cost among the departments. Two possible allocation bases would be number of employees or annual revenues. Annuities Insurance Total Revenues 232200 1127800 1360000 Number of employees 27 69 96 Assume Samson Trust Company chooses number of employees as the allocation base. Compute the allocation rate that Samson Trust Company will use. Round the rate to the nearest penny for your answer. USE THE ROUNDED RATE IN THIS ANSWER BOX in other calculations. How much computer services costs will estimated as related to the Annuities Department using this method? Round your answer to the nearest dollar.

Monthly revenue for the past 20 months of all the products sold in the Health and Beauty Department of Green Corporation is contained in the Excel data file. Use that data to answer the following.

1. Obtain a Moving Average forecast of the data using 3 periods to get the moving average – i.e., MA3 forecast. Plot the results on one chart with the plots showing both the actual line and the MA3 line. Show the screenshot of the plot (copy as picture and paste) below. What is the MAD of this forecast? What is the MAPE?

2. Obtain the Exponential Smoothing (ES) Forecast using a = 0.25. Plot the results on one chart with the plots showing both the actual line and the ES forecast line. Show the screenshot of the plot (copy as picture and paste) below. What is the MAD of this forecast? What is the MAPE?

A garage is installing a new​ "bubble-wash" car wash. It will promote the car wash as a fun activity for the​ family, and it is expected that the novelty of this approach will boost sales in the medium term. If the cost of capital is 88​%,by using the data in the table​ above, calculate the net present value​ (NPV) of this project.

Hours Open Total Revenue (dollars) 1 $275 2 375 3 450 4 500 5 53 6 550 Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour. a) What does the word "marginal" mean in economics? What is a marginal benefit? What is a marginal cost? What is marginal analysis? b) Using marginal analysis, how many hours should Ivan extend his hours of operations? c) What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours? d) What is Ivan's marginal cost if he decides to stay open for six hours instead of five hours?