As the activity level increases, which of the following will decrease?

1. Jebron Lames is considering the purchase of a car, which will cost him $125,000.   He will borrow the entire purchase price and make monthly payments over the next five years. The first payment is due next month and the interest rate is 3.10%. He will owe $____ on the car immediately following the 23^rd payment.

Explain the principle of the cost of production, Diminishing Marginal Productivity , Diminishing Marginal Utility in microeconomics. ( minimum a paragraph for each)

Anderson plans to acquire an automated assembly line with ten year life at a cost of sh 10 million, delivered and installed. He plans to use the equipment for only five years.He can borrow the required 10 million at a before cost of 10%.The estimated scrap value is sh 50,000 after ten years, but its estimated scrap value after five years is sh 1 million.He can lease the equipment for 5 years at a rental charge of sh 2.75m payable at the beginning of each year.The lessor will maintain the equipment. However if he buys he will bear the cost of maintenance of shs500,000 per year payable at the beginning of the year.The marginal tax rate is 40%

Analyze whether the company should purchase or lease the asset(

A monopolist has the following total cost function:

C = 50 + 10Q + 0.5Q²

They face the market demand:

P = 210 – 2Q

a. What is the profit-maximizing price and quantity set by this monopoly? What is this monopolist’s profit?  

b. Calculate the producer surplus, consumer surplus, and deadweight loss.  

c. If the price elasticity of demand (ԑ) faced by this monopolist at the equilibrium is –1.625, what is the Lerner Index?  

d. If the price elasticity of demand (ԑ) faced by this monopolist at the equilibrium is – 4, what is the Lerner Index?  

e. Is the price markup charged by the monopolist higher in the part c scenario or in the part d scenario? Why?  

You are the head of Corporate Investments for Everspring, Corp., which has a cost of capital (discount rate) of 10%. You are deciding on whether to invest your firm’s money in the three projects below. All cash flows for each project are shown; all projects are abandoned after Year 5.

  Project A Project B   Project C
Initial Investment ($100,000) ($500,000)   ($6,500,000)
Year 1 $30,000 ($100,000) $1,000,000
Year 2 $40,000 $200,000 $1,500,000
Year 3 $50,000 $200,000 $2,000,000
Year 4 $60,000 $200,000 $2,500,000
Year 5 $70,000 $200,000 $3,000,000

1. Assume each year’s cash flows occur evenly over the year. If your required payback period is 30 months, in which projects would you invest?

2. Assume each year’s cash flows occur at the end of the year. What is the net present value (NPV) of Project A?

3. Assume each year’s cash flows occur at the end of the year. What is the internal rate of return (IRR) of Project B?

4. Assume each year’s cash flows occur at the end of the year. What is the profitability index (PI) of Project C?

The manufacturing cost of Mocha Industries for three months of the year are provided below: Total Cost Production April $95,966 1,460 Units May 97,184 2,040 Units June 99,116 2,960 Units (a) Using the high-low method, determine the variable cost per unit. Round your answers to two decimal places. $ per unit (b) Using the high-low method, determine total fixed costs. $

Pharoah Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $34,200. Purchases since January 1 were $64,800; freight-in, $3,060; purchase returns and allowances, $2,160. Sales are made at 33 1/3% above cost and totaled $99,000 to March 9. Goods costing $9,810 were left undamaged by the fire; remaining goods were destroyed.

Compute the cost of goods destroyed. (Round gross profit percentage and final answer to 0 decimal places, e.g. 15% or 125.)

Compute the cost of goods destroyed, assuming that the gross profit is 33 ¹/₃% of sales. (Round ratios for computational purposes to 5 decimal places, e.g. 78.72345% and final answer to 0 decimal places, e.g. 28,987.)

Man-U-Facturing Inc. will buy a machine that has a cost of $850,000 and is expected to be useful for 10 years. At the end of the 10th year, the firm intends to sell the machine for an estimated price of $52,036. In addition, the yearly benefits are expected to be $201,952 while the annual maintenance costs are predicted to be $51,300. The company uses a 9% interest rate for this project and it is currently being taxed at a flat tax rate of 21%. This time assume that Man-U-Facturing Inc. uses straight-line depreciation. What the is the after-tax net present value (NPV)?

A firm in a perfectly competitive market has the following cost curve: TC = 200 + Q + 2Q^2 and The market demand is: Qd = 121 - P. There are 20 identical firms in the market (N =20) in the short-run.

e) At the equilibrium price found in part (c), how much profit is each firm making in the short-run? Will there be entry or exit in this market in the long-run?

f) What is the price of the product in the long-run?

g) How many firms are there in the market in the long-run?

h) How much profit is each firm making in the long-run