On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.  

Using the above information prepare an October income statement for the business.

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.  

Using the above information prepare an October 31 balance sheet for Ernst Consulting.

The CFO of Roland GmbH wants to improve its new production plant and has two mutually exclusive alternatives to choose from:

1. The first option would be to enlarge the plant and buy a new building. This involves an initial cost of $2,900,000 and is expected to generate $140,000 a month in revenue for the next 2 years at a discount rate of 9.5% compounded annually.

2. Alternatively, the company could invest the $2,900,000 in the stock market at an expected return of 9.5% per year compounded annually.

Decide which is the best choice between A or B. Your result must be supported by using the correct capital budgeting model and calculating the results of both A and B

Assume that you manage a firm that sells calculators. You want to sell calculators to both commercial users and home users, and so you have developed 2 types of calculators - fancy and basic calculators. Each customer type has the following valuations for each type of calculator: Home User Commercial User Fancy Calculator $100 $200 Basic Calculator $30 $50 If you have an 100 home users and 100 commercial users that at most will buy 1 calculator each, you will maximize total revenue by setting what price for the fancy calculator? (Write answer without the dollar sign.)

1. What is the Marginal Revenue at a quantity of 5?

2, What is the Marginal Cost at a quantity of 7?

3. Using the MR-MC rule, what is the profit maximizing quantity this firm should produce?

4. How much profit do they make at this quantity?

1. a. Consider a perfectly competitive firm in the short run. On a diagram, draw the firm's average cost, average variable cost, and marginal cost curves. Briefly discuss the relationship among these curves. b. On your diagram, show how the profit maximizing level of output is determined for this firm, given a market price. Show the firm making a positive profit. c. On your diagram, show total revenue, total cost and profits associated with the production level from part b. d. On your diagram show the firm’s short run supply curve. Explain clearly why this is the short run supply curve for the firm.

Assume that you manage a firm that sells calculators. You want to sell calculators to both commercial users and home users, and so you have developed 2 types of calculators - fancy and basic calculators. Each customer type has the following valuations for each type of calculator:

Home User Commercial User

Fancy Calculator $100 $200

Basic Calculator $30 $50

If you have an 100 home users and 100 commercial users that at most will buy 1 calculator each, you will maximize total revenue by setting what price for the fancy calculator? (Write answer without the dollar sign.)

Assume that you manage a firm that sells calculators. You want to sell calculators to both commercial users and home users, and so you have developed 2 types of calculators - fancy and basic calculators. Each customer type has the following valuations for each type of calculator:

If you have an 100 home users and 100 commercial users that at most will buy 1 calculator each, you will maximize total revenue by setting what price for the fancy calculator? (Write answer without the dollar sign.)

1. What is the Marginal Revenue at a quantity of 5?

2, What is the Marginal Cost at a quantity of 7?

3. Using the MR-MC rule, what is the profit maximizing quantity this firm should produce?

4. How much profit do they make at this quantity?