The price of a product in a competitive market is $200. If the cost per unit of producing the product is 80 + 0.1x dollars, where x is the number of units produced per month, how many units should the firm produce and sell to maximize its profit?

Tinto Company is planning to invest in a project at a cost of $135,000. This project has the following expected cash flows over its three-year life: Year 1, $45,000; Year 2, $52,000; and Year 3, $78,000. Management requires a 10% rate of return on its investments. Compute the net present value of this investment. Use PV tables that are in a separate file or see Appendix B of your textbook.

PV table:

1 .... 0.8696

2 .... 0.7561

3 .... 0.6575

In 1990, Metlock Company completed the construction of a building at a cost of $2,300,000 and first occupied it in January 1991. It was estimated that the building will have a useful life of 40 years and a salvage value of $69,000 at the end of that time.

Early in 2001, an addition to the building was constructed at a cost of $575,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $23,000.

In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate.

Compute the annual depreciation to be charged, beginning with 2019.

how do you determine production cost in corporate finance

If a good generates an external cost, the market will produce:

a.) Too much of the good.
b.) Some of the good but not enough.
c.) None of the good.
d.) An optimal amount of the good.

1. What is average total cost (ATC)? Why is that important to a firm?
2. If you were manager of In and Out Burger, how would you calculate the marginal cost of producing one more burger?
3. If you were a manager of In and Out Burger, how would you calculate the cost per burger produced? (of the average total cost per burger)?
4. Why in the short run, does marginal cost rise as more units are produced?
5. What is the long run production decision?
6. What are economies of scale? (Does it pay to get bigger in size?)
7. What are diseconomies of scale?

An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.

1. Compute b₁ and b₀ (to 1 decimal).
   b₁  
   b₀  
   
   Complete the estimated regression equation (to 1 decimal).
   =  +  x
   
2. What is the variable cost per unit produced (to 1 decimal)?
   $
   
3. Compute the coefficient of determination (to 3 decimals). Note: report r² between 0 and 1.
   r² =  
   
   What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)?
   %
   
4. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)?
   $

1. What is the opportunity cost of investing in capital?

a) The loss of consumption that results from redirecting resources toward investment

b) Higher taxes

c) Improved technology that leads to faster growth

2. True or False: If the extra output produced from an additional unit of capital falls as the stock of capital rises, the country is possibly overinvesting in capital.

3. What is the opportunity cost of investing in human capital?

a) Lower taxes

b) Improved technology that leads to faster growth

c) The goods or resources that could be produced if not investing in human capital

4. True or False: A country is possibly overinvesting in human capital if the best job a Ph.D. in philosophy can find is managing a restaurant.

Problem 4:  Refer to the following distribution and find:

            Cost of Textbooks                                                   Number

                $25   up to     $35                                                   2

                  35   up to       45                                                   5

                  45   up to       55                                                   7

                  55   up to       65                                                 20

                  65   up to       75                                                 16

a.  The Range?      

b. The standard deviation?  

3. Determine the Mean, Mode, Median?
4. Boxplot and describe skewness?                                                  
5. Are there any outliers?

Electric generating and transmission equipment is placed in service at a cost of $2,600,000. It is expected to last 30 years with a salvage value of $250,000.

Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years.