When parking a car in a downtown parking lot, drivers pay according to the number of hours or fraction thereof. The probability distribution of the number of hours cars are parked has been estimated as follows:
| X | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| P(X) | 0.224 | 0.142 | 0.106 | 0.08 | 0.057 | 0.039 | 0.033 | 0.319 |
A. Mean =
B. Standard Deviation =
The cost of parking is 2.25 dollars per hour. Calculate the mean and standard deviation of the amount of revenue each car generates.
A. Mean =
B. Standard Deviation =
In: Statistics and Probability
1. A company has fixed cost of $45,000, variable cost per unit of $11, and sells its product at $18 each.
a) What quantity must the firm sell in order to break-even? Explain how you reached this conclusion.
b) What is the firm's total revenue at the break-even level of output? Show your calculation.
c) What is the firm's total variable cost at the break-even level of output?
d) What quantity must the firm sell in order to make a profit of $62,000? Explain how you reached this conclusion.
In: Operations Management
Suppose the demand equation facing a firm is Q=1000-5Q, MR=200-0.4Q, and MC=$20.
A. Compute the maximum profit the firm can earn.
B. Suppose the firm is considering a quantity discount. It offers the first 400 units at a price of $120, and further units at a price of $80. How many units will the consumer buy in total?
C. Compute the profit if the quantity discount is implemented.
D. If the firm implemented a two part pricing strategy, what would be the fixed fee, variable fee, total revenue, and the total variable cost?
In: Economics
Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing quantities at the same time. The Market demand curve is given by P=200-Q. The only cost is a constant marginal cost of $17. Suppose Firm A produces a quantity of 50 and Firm B produces a quantity of 50. If Firm A decides to increase its quantity by 1 unit while Firm B continues to produce the same 50 units, what is the Marginal Revenue for Firm A from this extra unit? Enter a number only, no $ sign.
In: Economics
Lant Company has provided the following information:
• Cash sales totaled $290,000.
• Credit sales totaled $489,000.
• Cash collections from customers for services yet to be provided
totaled $89,000.
• A $25,000 loss from the sale of property and equipment
occurred.
• Interest income was $8,700.
• Interest expense was $18,900.
• Supplies expense was $390,000.
• Rent expense for the store was $39,000.
• Wages expense was $49,000.
• Other operating expenses totaled $79,000.
• Unearned revenue was $3,900.
What is the amount of Lant’s income before income taxes?
Multiple Choice
$275,800
$186,800
$389,000
$197,000
In: Accounting
Suppose that a firm in a competitive market faces the following revenues and costs:
Quantity | Total Revenue | Total Cost |
0 | $0 | $3 |
1 | $7 | $5 |
2 | $14 | $8 |
3 | $21 | $12 |
4 | $28 | $17 |
5 | $35 | $23 |
6 | $42 | $30 |
7 | $49 | $38 |
A. A competitive firm won’t produce beyond what quantity? Why?
B. What is the marginal cost of the 5th unit?
C. How much should the competitive firm produce to maximize profit?
D. What is the profit at the maximizing quantity?
In: Economics
When you undertook the preparation of the financial statements
for Sandhill Company at January 31, 2021, the following data were
available:
| At Cost | At Retail | |||
| Inventory, February 1, 2020 | $74,245 | $98,800 | ||
| Markdowns | 34,400 | |||
| Markups | 62,600 | |||
| Markdown cancellations | 20,800 | |||
| Markup cancellations | 9,300 | |||
| Purchases | 216,000 | 293,000 | ||
| Sales revenue | 330,000 | |||
| Purchases returns and allowances | 4,700 | 5,800 | ||
| Sales returns and allowances | 10,800 |
Compute the ending inventory at cost as of January 31, 2021, using
the retail method which approximates lower of cost or
market.
| Ending inventory at cost | $ |
In: Accounting
Assume a monopolist faces a market demand curve P = 190 - 3Q and has the short-run total cost function C = 540 + 10Q. What is the profit-maximizing level of output? What are profits? Graph the marginal revenue, marginal cost, and demand curves, and show the area that represents deadweight loss on the graph. (Hint: derive the MR and MC functions and set MC=MR and solve).
In Question 3 above, what would price and output be if the firm priced at socially efficient (competitive) levels? What is the magnitude of the deadweight loss caused by monopoly pricing?
In: Economics
In: Economics
"An oil and gas company is considering whether to begin drilling a new oil field. The company will need to pay $4.6 million as an initial investment in order to extract the oil. The company will operate the field for a total of 5 years, during which its annual profit will be $3,344,000. During the 6th year, the company will not operate or gain any revenue from the oil field, but it will need to pay $8,990,000 in environmental remediation costs to return the area to an acceptable state. What is the MAXIMUM interest rate for which this project is an acceptable investment? Enter the interest rate as a percentage. "
In: Finance