Who Done It Mystery Theater sells tickets for dinner and a show for each. The cost of providing dinner is per ticket and the fixed cost of operating the theater is per month. The company can accommodate patrons each month. What is the contribution margin per​ patron?

Answers

Answer 1

Answer:  $19

Explanation:

The Contribution Margin is defined as the Sales the Variable costs.

The Contribution Margin per patron is therefore;

= Ticket Price - Variable Cost which is the cost of dinner

= 40 - 21

= $19


Related Questions

HighLife Corporation has the following information: Average demand = 30 units per day Average lead time = 40 days Item unit cost = $45 for orders of less than 400 units Item unit cost = $40 for orders of 400 units or more Ordering cost = $50 Inventory carrying cost = 15 percent The business year is 300 days. Standard deviation of demand during lead time = 90 Desired service level = 95 percent What is the EOQ if HighLife pays $45/unit? Due to possible differences in rounding, choose the closest answer.\

Answers

Answer:

365.15 units

Explanation:

The computation of the economic order quantity is shown below:

[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]

where,

Annual demand is

= 30 units × 300 days

= 90,000 units

ordering cost is $50

Carrying cost is

= $45 × 15%

= $6.75

Now placing these values to the above formula

So, the economic order quantity is

[tex]= \sqrt{\frac{2\times \text{90,000}\times \text{\$50}}{\text{\$6.75}}}[/tex]

= 365.15 units

We simply applied the above formula so that the EOQ could come

You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 17% APR, compounded monthly, or borrow the money from youe parents, who want an interest payment of 6% every six months. which is the lower rate? (Dont round intermediate steps to decimal places)

Answers

Answer: Parent's rate is lower.

Explanation:

The lower rate will be the lower Effective Annual rate, the formula of which is;

[tex]EAR = (1 + interest rate/compounding frequency) ^{compounding frequency} - 1[/tex]

Credit Card

[tex]EAR = (1 + interest rate/compounding frequency) ^{compounding frequency} - 1[/tex]

[tex]EAR = (1 + interest rate/compounding frequency) ^{compounding frequency} - 1\\= ( 1 + \frac{0.17}{12})^{12} - 1\\= 0.184[/tex]

= 18.4%

From your parents

[tex]EAR = (1 + interest rate/compounding frequency) ^{compounding frequency} - 1\\= ( 1 + 0.07) ^{2} - 1\\= 0.1449[/tex]

= 14.5%

Parent's rate is lower.

The before-trade domestic price of tomatoes in the United States is $500 per ton. The world price of tomatoes is $400 per ton. The U.S. is a price-taker in the tomatoes market.
If trade in tomatoes is allowed, the United States:______
a) will experience increases in both consumer surplus and producer surplus.
b) may become either an importer or an exporter of tomatoes, but this cannot be determined.
c) will become an exporter of tomatoes.
d) will become an importer of tomatoes.

Answers

Answer:

d) will become an importer of tomatoes.

Explanation:

Consumer surplus would increase because the price at which they buy tomatoes would reduce while producer surplus would reduce because the price of tomatoes would reduce as a result of international trade.

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.Because the price of tomatoes in the US is greater than the price of tomatoes in the world, when the US begins international trade, it would import tomatoes because it is inefficient in the production of tomatoes.  

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Och, Inc., is considering a project that will result in initial aftertax cash savings of $1.75 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .8, a cost of equity of 11.5 percent, and an aftertax cost of debt of 4.3 percent. The cost-saving proposal is somewhat riskier than the usual projects the firm undertakes; management uses the subjective approach and applies an adjustment factor of +3 percent to the cost of capital for such risky projects. What is the maximum initial cost the company would be willing to pay for the project?

Answers

Answer:

$18,191,268.19

Explanation:

the company's WACC = (weight of equity x Re) + (weight of debt x after tax cost of debt) = (0.6 x 11.5%) + (0.4 x 4.3%) = 6.9% + 1.72% = 8.62%

discount rate adjustment factor = 8.62% + 3% = 11.62%

to determine the value of the project:

$1,750,000 / (11.62% - 2%) = $1,750,000 / 9.62% = $18,191,268.19

If the initial outlay is $18,191,268.19, then the project's NPV = $0. This is the maximum amount that the firm should be willing to invest in this project.

All of the following actions by a custodian in an account opened under the Uniform Gifts to Minors Act are permitted except:_______.
A. donating funds to the account to make additional investments
B. withdrawing funds from the account for the custodian's use
C. managing the investments in the account with the objective of generating enough income for college tuition
D. selling securities in the account to generate proceeds for other investments

Answers

Answer: B. withdrawing funds from the account for the custodian's use

Explanation:

Under the Uniform Gifts to Minors Act, the Custodian's duty is to manage the account for the minor and allocate the assets within in such a way that it will bring about the best returns for the minor.

Custodians should not abuse this power for their own benefit or gain which is why the custodian withdrawing funds from the account for their own use is a violation of the act.

Explain how you would value a stock. Provide an example of a valuation of a stock based on retrieved real data. Include evidence of the retrieved data in your answer. Compare your valuation with the actual price of the stock at the designated time for your valuation.

Answers

Answer with Explanation:

There are numerous stock valuing models but here, I will use Dividend Valuation Model which is based on finding the intrinsic value of Stock which is the present value of the stock at a required rate of return. The formula to calculate Intrinsic value of stock is given as under:

P0= D0   *  (1 + g) / (ke - g)

Here

P0 is the intrinsic value of the stock

D0 is the dividend just paid

g is the growth rate

ke is the investor's required rate of return

The model doesn't holds if the company doesn't pays Dividend.

Now suppose that the Dividend just paid by Apple is $20 per stock. The anticipated growth rate of dividend is 10% and the required rate of return is at 15%.

By putting values in the above equation, we have:

P0= $20 * (1 + 10%) / (15% - 10%)

= $20 / (15% - 10%)

= $400 per share

The value of stock of Apple is $400 per share which must be its fair market value as per the Dividend Valuation Model.

As per the model, if the value of stock is higher as per dividend valuation model then we must purchase the stock as it will generate higher value and vice versa. The inherent limitation of the model is that it assumes that the dividend is growing at constant rate and is consistently paid. The main disadvantage of Dividend valuation model is that it doesn't account for political factors, economical factors, evolving business risks, technological factors, etc.

Which statement thanks respondent for their participation, describes how incentives are received, and reassures them of the confidentiality of their responses

Answers

Answer:

Closing statement

Explanation:

Hope it helped

Lead time for one of your​ fastest-moving products is 24 days. Demand during this period averages 110 units per day. ​a) What would be an appropriate reorder​ point? nothing units ​(enter your response as a whole​ number). ​b) How does your answer change if demand during lead time​ doubles? nothing units ​(enter your response as a whole​ number). ​c) How does your answer change if demand during lead time drops in​ half? nothing units ​(enter your response as a whole​ number).

Answers

Answer:

a.) reorder point = 2,640 units

b.) reorder point = 5,280 units (reorder point doubles)

c.) reorder point = 1,320 units (reorder point drops in half)

Explanation:

Reorder point is the inventory level (point) at which action is taken (order placed) to replenish the stocked item. It is calculated as follows:

Reorder point = (Lead time × average daily sales) + safety stock

Lead time = 24 days

average daily sales = 110 units

safety stock = 0 (not given)

a.) reorder point = (Lead time × average daily sales) + safety stock

reorder point = (24 × 110) + 0 = 2,640 units

b.) if demand during lead time doubles:

lead time = 24 days

average daily sales = (110 × 2) = 220

∴ reorder point = 220 × 24 = 5,280 units

Therefore the reorder point doubles

c.) if demand during lead time drops in half:

lead time = 24 days

average daily demand = (110 ÷ 2) = 55 units

∴ reorder point = 24 × 55 = 1,320 units

Therefore the reorder point drops in half.

Sam has contracted with Dave to purchase Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made. Three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, what should he do? Multiple Choice Immediately seek injunctive relief. Immediately sue for specific performance. Immediately sue for compensatory damages. Immediately sue for consequential damages.

Answers

Answer: Immediately seek injunctive relief.

Explanation:

An injunctive relief is an order by the court stopping an action from taking place. From the question, we are told that Sam has contracted with Dave to buy Dave's racing bike, with payment and delivery of the bicycle to be made 10 days after the contract was made.

We are further told that three days later Sam hears that Dave is going to sell the bike to Gene in three days at a higher price. If Sam really wants the bike, he should seek injunctive relief. By doing so, the court will stop Dave from selling the bike to Gene.

Evaluate the Ritz-Carlton business model and associate key quality characteristics in the operations of a hotel set-up process.

Answers

Answer:

Ritz Carlton is luxury hotel chain of America. The company has 101 luxury hotel in more than 30 countries of the world. The success of Ritz Carlton is mainly because they keep the comfort of their guests as their highest priority. Their mission statement clearly states that comfort and genuine care of their guests is utmost important to them.

Explanation:

Their business model focuses entirely on their customers. Ritz Carlton has created its leading brand by providing great ambiance to the visitors and its guest. One can dream of staying at such luxury hotel. They are famous for their hospitality of their guests. The hotel management believes on total quality management. It has set highest standard for themselves and strive to meet them by providing better and better service to its guests.

If a bank that faces a 10% reserve ratio received a deposit of $50,000 and makes a loan to a customer for $5,000, what is the consequence if the bank then deposits the rest of the funds at the Federal Reserve?

Answers

Answer:

Excess reserve increases by $40,000

Required reserve increases by $5,000

Explanation:

In order to calculate the reserve, we need to multiply the Deposit received by a required reserve ratio.

DATA

Reserve ratio = 10%

Deposit received = $50,000

Loan to customer = $5,000

Solution

Reserve =  Deposit x Required reserve ratio

Reserve = $50,000 x 10%

Reserve = $5,000

After providing a $5,000 loan to the customer and keeping $5,000 as a reserve remaining $40,000 would be deposited in the Federal Reserve.

what is not a major benefit of co-locating team members from different cultures in one place instead of having a team

Answers

Incomplete question. Here are the options:

A. Short distance to the customer markets

B. Reduced burden from travelling and international meetings

C. Enhanced communications and a sense of community

D. Identical working hours without time zone difference

Answer:

A. Short distance to the customer markets

Explanation:

It is noteworthy to remember we are concerned about what is not a major benefit of co-locating team members from different cultures in one place instead of having a team.

The other benefits like; reduced burden from travelling and international meetings, enhanced communications and a sense of community and having Identical working hours without time zone difference are major in nature as they have a direct impact on cost savings and work efficiency.

Mullineaux Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 11 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 35 percent. What is Mullineaux WACC

Answers

Answer:

Mullineaux Corporation

WACC (Weighted Average Cost of Capital):

WACC = (11% of 70%) + (5% of 5%) + (7% of 25%) (1 - 35%)

= 0.077 + 0.0025 + 0.0175(65%)

= 0.09087

= 9.1%

Explanation:

Target Capital Structure:

Common stock = 70%

Preferred stock = 5%

Debt = 25%

Total = 100%

Cost of:

Equity = 11%

Preferred stock = 5%

Debt (pretax) = 7%

Tax rate = 35%

Mullineaux's WACC is the weighted average cost of its capital sources, including equity and debt.  It means that Mullineaux Corporation has to weigh each class of capital based on their capital structure weights in order to calculate the average.  This WACC therefore represents the hurdle rate which a project must meet for Mullineaux Corporation to accept or reject the project.

At an output level of 53,000 units, you calculate that the degree of operating leverage is 3.21. If output rises to 57,000 units, what will the percentage change in operating cash flow be? Suppose fixed costs are $175,000. What is the operating cash flow at 46,000 units? The degree of operating leverage? that the degree of operating

Answers

Answer:

If output rises to 57,000 units, what will the percentage change in operating cash flow be?

24.23%

What is the operating cash flow at 46,000 units?

$45,613.84

The degree of operating leverage (at 46,000 units)?

4.84

Explanation:

degree of operating leverage = [quantity x (price - variable costs)] / {[quantity x (price - variable costs)] - fixed costs}

degree of operating leverage x {[quantity x (price - variable costs)] - fixed costs} = [quantity x (price - variable costs)]

3.21 x {[53000 x (contribution margin)] - fixed costs} = [53000 x (contribution margin)]

(3.21 x 53000 x contribution margin) - (3.21 x 175000) = 53000 x contribution margin

let C = contribution margin

170130C - 561750 = 53000C

117130C = 561750

C = 561750 / 117130 = 4.795953

operating cash flow (at 53,000) = (53,000 x $4.795953) - $175,000 = $79,185.52

operating cash flow (at 57,000) = (57,000 x $4.795953) - $175,000 = $98,369.32

% change = ($98,369.32 - $79,185.52) / $79,185.52 = 24.23%

operating cash flow (at 46,000) = (46,000 x $4.795953) - $175,000 = $45,613.84

% change in operating cash flows = ($45,613.84 - $79,185.52) / $79,185.52 = -43.4%

% change in sales = (46,000 - 53,000) / 53,000 = -13.21

degree of operating leverage = $220,613.84 / $45,613.74 = 4.84

The simple rate of return is also called all of the following except ________. annual rate of return unadjusted rate of return accounting rate of return

Answers

Answer: annual rate of return

Explanation:

The simple rate of return is also called the unadjusted rate of return or the accounting rate of return.

The simple rate of return is calculated when the incremental net operating income for the year is taken and then divided by the initial investment.

It should be noted that it's not called the annual rate of return.

You purchased 1,000 shares of stock in Natural Chicken Wings, Inc., at a price of $43.37 per share. Since you purchased the stock, you have received dividends of $.95 per share. Today, you sold your stock at a price of $46.62 per share. What was your total percentage return on this investment?

Answers

Answer:

9.68%

Explanation:

Percent Return on Investment is calculated as Net Profit / Cost of Investment x 100

Net Profit= $46,620 (1,000 x $46.62 per share) + $950 (1,000 x $.95 per share) - $43,370 (1,000 x $43.37 per share) = $4,200

Cost of Investment= $43,370 (1,000 x $43.37 per share)

Percent Return on Investment=  $4,200 / $43,370 x 100 = 9.68%

What is the present value of a perpetuity that pays you annual, end-of-year payments of $950? Use a nominal rate (monthly compounding) of 7.50%.

Answers

Answer:

The present value of the perpetuity is $12,242.27.

Explanation:

A perpetuity is an annuity that provide cash flow for an infinite period .Examples are Non -redeemable Preference Share.

Present Value (perpetuity) = Payments ÷ Required Rate

But, first change the 7.50 % nominal rate to Annual Effective Rate to match the period of Cash flow.

Effective Rate = (1 + r / m)^m - 1

                       = ( 1 + 0.0750 / 12) ^12 -1

                       = 7.76%

Therefore, Present Value (perpetuity) = $950 ÷  7.76%

                                                              = $12,242.27

At the certain interest rate, present value (PV) is the current value of a future sum of money or stream of cash flows.

The discount rate determines the present value of the cash flows, and the higher the discount rate, the lower the current value of future cash flows.

The present value of the perpetuity is $12,242.27.

A perpetuity is an annuity that payments out during an indefinite period of time. Non-redeemable Preference Share is an example.

Present Value (perpetuity) = [tex]\frac{\text{Payments}}{\text{Required Rate}}[/tex]

However, to match the Working capital period, change a 7.50 percent nominal rate to a Yearly Effective Tax rate.

[tex]\text{Effective Rate} = (1 + \frac{r}{m} )^m - 1= [1 + \frac{0.0750}{12}]^{12} -1= 7.76\%[/tex]

Therefore, Present Value (perpetuity)= [tex]\frac{\$950}{7.76\%} = $12,242.27[/tex]

To know more about the calculations of the present value, refer to the link below:

https://brainly.com/question/15036500

The risk-free rate of return is 3.2 percent and the market risk premium is 4.6 percent. What is the expected rate of return on a stock with a beta of 2.12

Answers

Answer:

12.95%

Explanation:

The risk free rate of return is 3.2%

The market risk premium is 4.6%

The beta is 2.12

Therefore, the expected rate of return on a stock can be calculated as follows

= 3.2% + (2.12×4.6%)

= 3.2% + 9.752

= 12.95%

Hence the expected rate of return on a stock is 12.95%

The Sprint vs. Verizon ads that compare the features and pricing of the two networks are examples of competitive advertising. True False

Answers

Answer:

True

Explanation:

They are trying to win over customers by comparing each others features in a competition

Competitive advertising is demonstrated by the Sprint vs. Verizon adverts, which compare the functionality and pricing of the two networks. So, it is a true statement.

What is competitive advertising?

Competitive advertising is the act of showcasing or promoting one's product in comparison to the product of another company.

This form of marketing can be used to target customers who are devoted to the other brand, prompting them to reassess their purchasing patterns.

The three types of competitive advertising are:

ComparativeReminderReinforcement

For more information about competitive advertising, refer below

https://brainly.com/question/3463451

Jock and Kyla decide to wager, in violation of a state statute, on the outcome of a football game. They each deposit money with Len, who agrees to pay the winner of the bet. Before the game begins, Kyla tells Len that she changed her mind about the bet. Kyla can recover Group of answer choices

Answers

Answer:

The amount of her bet only

Explanation:

A wager is a gamble on a particular outcome of a situation. In this case the outcome of a football match.

However wagering in such a manner is a violation of state staute. So this is an illegal activity.

Jock and Kyla deposit funds for the wager with Len. Before the bet of Kyla changes her mind she can recover the money she deposited.

Len will not be able to withhold he deposit because she can sue and claim this is an illegal activity that she does not want to be part of. Len will be forced.to return at least her own money.

1. Discuss how core factors, cues to quality, and interpersonal factors of a product influence your buying decisions. Discuss with supporting examples.

Answers

Explanation:

Interpersonal product feature play a role in determining one's buying decision. For example, an individual who is open to new experiences may be more likely to try a new technology.

Another example is that of an individual who has a negative view of how he or she looks or dresses, he or she may tend to seek and buy products that could enhance how they feel about themselves.

As regards the quality of a product, it is usually based on the purchase plan period. For example, an individual who notices he needs an item urgently may be less likely to include quality in his buying decision, especially when it's a life-saving item for an emergency. But someone who has the time and has been planning to buy an item for months, will more likely examine quality before he makes a buying decision.

What is the expected annual capital gain yield for Orange Corp stock, based on the Constant Dividend Growth Model

Answers

Complete Question:

What is the expected annual capital gain yield for Orange Corp stock, based on the Constant Dividend Growth Model? The company plans to pay an annual dividend of of $4.12 per share in one year. The expected annual growth rate of the dividend is 12.9%, and the required rate of return for the stock is 16.63%. Answer as a percentage, 2 decimal places (e.g., 12.34% as 12.34).

Answer:

12.9%

Explanation:

As we know that:

Capital Gain Yield  = (P1 - P0) / P0

Step 1: Find P0

Po = D1  / (Ke - g)

Here

D1 is $4.12 per share

Ke is 16.63%

g is 12.9%

By putting values, we have:

Po = $4.12 / (16.63% - 12.9%)

= $110.46

Step 2: Find P1

P1 = D2  / (Ke - g)

Here

D2 = D1 * (1 + 12.9%) = $4.12 per share  * (1 + 12.9%) = $4.65

Ke is 16.63%

g is 12.9%

By putting values, we have:

Po = $4.65 / (16.63% - 12.9%)

= $124.70

Step3: Find Annual Capital Gain Yield

Capital Gain Yield  = (P1 - P0) / P0

Now by putting values, we have:

Capital Gain Yield  = ($124.7 - $110.46) / $110.46

= 12.9%

On July 1, 20X1, James and Short formed a partnership. James contributed cash. Short, previously a sole proprietor, contributed property other than cash, including realty subject to a mortgage, which the partnership assumed. Short’s capital account on July 1, 20X1, should be recorded at

Answers

Answer:

James and Short LLC

Short's capital account on July 1, 20X1 should be recorded at the fair value of contributed property minus the mortgage liability, which the partnership assumed.

Explanation:

The fair value of contributed property is the current market value of the contributed property by Short.  It is the market value that will determine how the contributed property can be valued.  The market value assumes that the contributed property is being sold in pieces and not as a whole.  This is why the value is considered a fair basis for recognizing the capital contribution of Short into the partnership.

(Table) If Jake and Sue are the only buyers of the local pizzeria's pizza, what is the market demand for pizzas at each of the prices listed, starting at the market price of $5? QJ is the quantity demanded at each price by Jake, and QS is the quantity demanded at each price by Sue.

Answers

Answer:

This is the table that the question is referring to:

Price       QJ         QS

5              4             2

10             3             1

15             2            0

20            1             0

Total market demand is the sum of the individual market demands. In this market, it is the sum of the market demand of Jake and Sue.

Market demand at the price of $5 is 7 pizzas.

Market demand at the price of $10 is 4 pizzas.

Market demand at the price of $15 is 2 pizzas.

Market demand at the price of $20 is 1 pizza.

Jordan is the marketing head of Hastings Comprehensive Systems. He usually strives for long-term improvement rather than short-term profit, regardless of the economic environment. In the context of Deming's 14 points of quality, this is an example of

Answers

Answer:

Create constancy of purpose

Explanation:

Deming 14 points of quality are recommended management strategy to transform business effectiveness.

Deming postulated that by increasing quality one is able to reduce cost and increase efficiency of a business.

The first of his 14 points is to create a constancy of purpose. This is achieved by striving for long-term improvement rather than short-term profit, as is done by Jordan in the given scenario.

The 14 points of Deming are given below:

Create a constancy of purpose

Adopt the new philosophy

Stop depending on inspections

Using a single supplier for one item

Improve constantly and forever

Use training on the job

Implement leadership

Eliminate fear

Breakdown barriers between departments

Get rid of unclear slogans

Eliminate management by objectives

Remove barriers to pride of workmanship

Implement education and self improvement

Make transformation everyone's job

Refer to the following lease amortization schedule. The five payments are made annually starting with the inception of the lease. A $2,000 bargin purchase option is exercisable at the end of the five-year lease. The asset has an expected economic life of eight years.
Lease Payment Cash Payment Effective Interest Decrease in Balance Balance
34,600
1 8,000 ?? ?? 26,600
2 8,000 2,660 5,340 21,260
3 8,000 2,126 5,874 15,386
4 8,000 1,539 6,461 8,925
5 8,000 ?? ?? ??
6 2,000 182 1,818 0
What is the effective annual inerest rate?
A. 9%
B. 10%
C. 11%
D. 20%

Answers

Answer:

B. 10%

Explanation:

The computation of the effective annual interest rate is shown below:-

Effective annual interest rate = Lease payment third effective interest ÷ Lease payment second balance × 100

= $2,126 ÷ $21,260 × 100

= 10%

Therefore for computing the effective annual interest rate we simply applied the above formula.

Hence the correct option is B.

Instruments had retained earnings of at December​ 31, . Net income for totaled ​, and dividends declared for were . How much retained earnings should report at December​ 31, ​?

Answers

Answer:

B. $ 490,000

Explanation:

According to the given situation, the computation of retained earning in the year end is shown below:-

Ending retained earning = Beginning Retained Earnings + Net Income for the year - Dividend

= $360,000 + $180,000 - $50,000

= $490,000

Therefore for computing the ending retained earning we simply applied the above formula.

Despite the theoretical elegance of this hypothesis, empirical studies have come to the opposite conclusion. Despite the favorable effect of international diversification of cash flows, bankruptcy risk was only about the same for MNEs as for domestic firms. However, MNEs faced higher costs for each of the following EXCEPT:
A) agency costs.
B) political risk.
C) asymmetric information.
D) In fact, each of these costs were higher for the MNE than for the domestic firm.

Answers

Answer:

D) In fact, each of these costs were higher for the MNE than for the domestic firm.

Explanation:

It has been concluded through empirical studies, that Multinational Enterprises, MNEs encounters various factors leading to lower debt ratios and a higher cost of long-term debt, such as greater agency costs, political risk, asymmetric information, and foreign exchange risk,

Hence, given the question above, the right answer is option D "In fact, each of these costs was higher for the MNE than for the domestic firm."

A firm is currently producing 3,000 units of output daily by employing 20 units of labor at a price of $100 per unit and 40 units of capital at a price of $40 per unit. The marginal product of the last unit of labor employed is 50, and the marginal product of the last unit of capital employed is 30. In order to minimize its production costs, the firm should do which of the following?
a. Employ more labor and less capital because the marginal product of labor is greater than the marginal product of capital.
b. Employ less labor and more capital because the firm is currently spending $2,000 on labor and only $1,600 on capital.
c. Employ more labor and less capital because the firm already employs 40 units of capital and only 20 units of labor.
d. Employ less labor and more capital because the marginal product per dollar spent on labor is less than the marginal product per dollar spent on capital.
e. Employ less labor and more capital because a unit of labor costs $100 while a unit of capital costs only $40.

Answers

Answer:

e. Employ less labor and more capital because a unit of labor costs $100 while a unit of capital costs only $40.

Explanation:

By employing less labor and more capital, the firm can produce the 3,000 units of daily output at lower production costs since 40 units of capital cost $40 per unit, than it can with 20 units of labor priced $100 per unit.  Capital can, therefore, minimize the total production costs, as less labor is used.  Capital resources are often in the form of equipment and technological advancement that make work easier, faster, and more efficient with the highest quality possible.

Based on the marginal products of labor and capital, the company should d. Employ less labor and more capital because the marginal product per dollar spent on labor is less than the marginal product per dollar spent on capital.

The company should invest more in the method of production that gives it more marginal product per unit.

Marginal product per unit of labor:

= Marginal product of labor / cost of labor

= 50 / 100

= 0.5 per unit

Marginal product per unit of capital:

= 30 / 40

= 0.75 per unit

Capital has more marginal product per unit and so should be invested in more than labor.

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Two investment advisors are comparing performance. Advisor A averaged a 20% return with a portfolio beta of 1.5 and Advisor B averaged a 15% return with a portfolio beta of 1.2. If the T-bill rate was 5% and the market return during the period was 13%, which advisor was the better stock picker?

Answers

Answer:

Advisor A

Explanation:

t bill rate = 0.05

market rate = 0.13

the beta of the market is always 1

the rate of return= 0.05 + (0.13 - 0.05) x 1

= 0.13

which is 13%

this is for advisor A.

with a return of 20% and 1.5 beta

0.05 + ( 0.20 - 0.05) x 1.5

= 27.5% for advisor b

when the return is 15% and beta is 1.2

0.05 + (0.15 - 0.05) x 1.2

= 17%

Therefore advisor a is better

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