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- A firm is considering an investment that will earn a 6 rate of return. If it were to borrow the money, it would have of pay 8 interest on the loan, but it currently has the cash, so it will But need to borrow. Should the firm make line investment? Show your work.Interest Table Cost.1.2: Amount Rates Loan #1 = $28,000 2.40% Loan #2 = $40,000 2.50% Owner's Last Job Wage $35,000 Labor = $12,000 %3D Ingredients = $40,000 Rents = $5,0000 Total Revenue $200,000 According to information in Table Cost.1.2, accounting profits is about O No answer text provided. O 574.328 O No answer text provided. O S73,328Table Cost.1.2: Amount Interest Rates Loan #1 = $25,000 2.40% Loan #2 = $40,000 Owner's Last Job Wage = $42,000 2.50% %3D Labor = $10,000 Ingredients = $40,000 Rents = $5,000 Total Revenue = $200,000 According to information in Table Cost.1.2, accounting profits is about O $78,400 O No answer text provided. O No answer text provided. O $78.800
- Table Cost.1.2: Loan #1 - Loan #2 - Interest Rates $25,000 2.00% $40,000 2.50% Owner's Last Job Wage- $36.000 Labor- $8,000 $40,000 $5,000 $200,000 O No answer text provided. O No answer text provided. Amount Ingredients Rents- Total Revenue - According to information in Table Cost 1.2, accounting profits is about O $80,500 O $81.500Interest Table Cost.1.2: Amount Rates Loan #1 = $25,000 3.20% Loan #2 = $40,000 4.30% Owner's Last Job Wage $36,000 Labor = $8,000 Ingredients = $40,000 Rents = $5,000 Total Revenue $200,000 According to information in Table Cost. 1.2, accounting profits is about O No answer text provided. O $79 420 O No answer text provided. O S79.480 擁環恭2. Consider the following costs of owning and operating a car. A $25,000 Ford Taurus financed over 60 months at 7 percent interest has a monthly payment of $495.03. Insurance costs $100 per month no matter how much you drive. The car gets 20 miles per gallon and uses unleaded regular gasoline that costs $3.50 per gallon. Finally, suppose that wear and tear on the car costs about 15 cents per mile. a. Which costs are fixed b. Which costs are variable? c. In deciding whether or not to drive from New York to Pittsburgh (about 1,000 miles round-trip) to visit a friend, which costs should count?
- 17- Output Total Revenue Total Cost $0 $30 $60 $90 $120 $150 $180 In the above table, the price of the product is A) $30. B) $150. C) $147. D) $180 $25 $49 $69 $91 $117 $147 $180 2 4 5 6. а. $30. b. $160 C. $150 d. $1702.50% Table Cost.1.2: Amount Interest Rate Loan #1 = $40,000 1.50% Loan #2 = $50,000 2.50% Owner's Last Job Wage = $55,000 %3D Labor = $10,000 Ingredients = $50,000 Rents = $1,500 Total Revenue $190,000 According to information in Table Cost.1.2 where loans are used for establishing the firm, accounting and economic profits are and respectively. O $36.650; minus $18,350 O $36.650; minus $18.450Interest Table Cost.1.2: Amount Rates Loan #1 = $25,000 2.00% Loan #2 = $40,000 Owner's Last Job Wage $36,000 2.50% Labor= $8,000 Ingredients = $40,000 Rents $5,000 Total Revenue = $200,000 According to information in Table Cost. 1.2, accounting profits is about O $80.500 O No answer text provided. OS81.500 ONo answer text provided.
- 5d What is the relationship between accounting profit and economic profit? Which is relevant for a firm’s decision to continue production and why? Give examples as to what may cause a divergence between accounting and economic profit2 You run a business selling used hand tools. The rent on your building is $1400/month. Utilities average $600 month. Your average cost to buy your used hand tools from a wholesaler is $9.5/tool. You spend S0.50/tool to package and individually price them. You have two employees in your store during the opening hours that sell the tools. Each employee gets a salary of $12/hour. Your store is open 10 hours/day, every day of the week. Over the course of a year, this averages out to 30 days'month. The average selling price for a used tool is $22. How many tools per month must be sold to make $4000 profit each month.Why do economists classify normal profits as costs? O A normal profit is the amount required to ensure continued supply of the product. O Normal profits have elements of revenue and cost. OA normal profit has to be paid to the IRS. Normal profits cannot be counted as revenue.