Junius Corp is a monopoly company producing digital telematic tools in Malaysia. Based on its observation on the current uncertainty surrounding the economy due to the Covid-19 Pandemic, there is a 50% chance the firm’s demand curve will be P=20-Q and a 50% chance it will be P =100-Q. The marginal cost of the firm is MC = 4Q.

a. Derive the expression for the expected marginal revenue function for the firm.

b. What is the expected profit-maximizing quantity of the firm?

c. What is the expected profit-maximizing price of the firm?

d. What is the expected total profit of the firm?

Sometimes the determination of whether something is considered variable or fixed is dependent on position and viewpoint. For example, take a multiple location retail establishment. If viewing something like the general manager’s compensation from the store perspective, such compensation would be fixed. However, the same compensation, when viewed by the home office as just one element of the store, can be considered variable (along with all other revenue/expense items in that particular store location).

Please provide other examples of such situations where the perspective of the viewer would determine the categorization of the cost as being fixed or variable.

The magic car company can sell a new car for

P(x) = 1500 - 3x... Fixed overhead = $60,000..... cost per car = $200.

a) Write down the formulas for R(x) and C(x). the revenue and cost functions, in terms of x, the number of cars produced and sold.

b) Let P(x) = R(x) - C(x) be the profit function. Sketch the graph of P(x) indicating the appropriate domain.

c) How many cars do you need to break even?

d) What is the maximum possible profit?

A hospital is considering the purchase of a piece of medical equipment that costs $1,500,000 and has a useful life of five years and no salvage value at the end of its useful life. The equipment generates revenues of $650,000 per year and operating expenses of $300,000. Calculate NPV, payback, BCR, and IRR, should the equipment be purchased if the discount rate is 6% or 10%?

           Revenue   Expense

   Year 0       -      $1,500,000 (investment)

   Year 1       $650,000   $300,000

   Year 2       $650,000   $300,000

   Year 3       $650,000   $300,000

   Year 4       $650,000   $300,000

   Year 5       $650,000   $300,000

Question No: 2 (15 minutes)

Notson Company gathered the following condensed data for the year ended December 31, 2017:

Required:

Use the above information to prepare a multiple-step income statement for the year ended December 31, 2017.

Draw the cash flow diagram for the following data.
A company purchases a machine to make widgets for $10,000. the collect payment for their widgets at the end of the year in which they are delivered. At the end of 5 years the machine must be scrapped at which time its value is $0. The following is the net revenue generated by the widget machine.
Year 1 - $2,500
Year 2 - $3,500
Year 3 - $2,250
Year 4 - $3,000
Year 5 - $2,000

What is the present worth of the widget machine if the companies TVOM is 5.37%? $  
What is the future worth at the end of the 5 year life cycle? $

1. On August 1, 2019, Dillard sold 800 bundles super shaver complete. Each bundle sold for $750 a bundle consisting of 1) super shaver with a retail cost of $100 and a 24 month subscription to super shaver supplies. The supplies if sold separately would sell for $30 per month. Dillard recorded sales revenue of $600,000 in 2019 related to these bundles. All costs related to the super shaver and the shipments of supplies were expensed properly.

Please prepare all appropriate journal entries for the year ending 12/31/2019

1.Suppose the demand and supply for milk is described by the following equations: Qd= 600-100P and Qs= -150 + 150P, where P is the price of a gallon of milk.a.What is the equilibrium price and quantity?b.Suppose the US government imposes a $1 per gallon milk tax on dairy farmers. What is the new equilibrium price and quantity? How much do consumers now pay? How much do producers now receive? How much tax revenue is raised by the milk tax?c.Based on your answer to part b, is supply or demand more elastic? Explain.

The operations of Smits Corporation are divided into the Child Division and the Jackson Division. Projections for the next year are as follows:

Operating income for Smits Corporation as a whole if the Jackson Division were dropped would be

Suppose the demand function P = 10 - Q, and the supply function is: P = Q, where P is price and Q is quantity. Calculate the equilibrium price and quantity.

b.Suppose government imposes per unit tax of $2 on consumers. The new demand function becomes: P = 8 – Q, while the supply function remains: P = Q. Calculate the new equilibrium price and quantity.

c.Based on (b), calculate the consumer surplus, producer surplus, tax revenue and the deadweight loss under the tax rate in (b). Also explain your answers in (c) diagrammatically.