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-BARSIC- [3]
1 year ago
14

A company owns an empty office building and is deciding how to use it next year. It would cost $100,000 to staff the office and

$15,000 for equipment. The revenues would be $160,000. Meanwhile, it could rent the office to another company for $75,000 in revenues. In both cases, the company must pay $5,000 for the building's electricity.
Required:
a) If the company is seeking to maximize its economic profit, which course should it pursue and what is the outcome?
Business
1 answer:
Galina-37 [17]1 year ago
5 0

Answer:

It is more profitable to rent the office. Income will increase by $30,000

Explanation:

Giving the following information:

It would cost $100,000 to staff the office and $15,000 for equipment. The revenues would be $160,000.

Rent= $75,000 in revenues.

We need to calculate the most profitable decision:

Option A:

Income= 160,000 - 100,000 - 15,000= 45,000

Option B:

Rent= 75,000

It is more profitable to rent the office.

You might be interested in
Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 340,000 Variable expenses 170,000 Con
djyliett [7]

Answer:

$204,000

Explanation:

Given that,

Total Sales = $ 340,000

Variable expenses = $170,000

Contribution margin = $170,000

Fixed expenses = $108,000

Net operating income = $ 62,000

Contribution margin ratio:

= Contribution margin ÷ Sales

= $170,000 ÷ $ 340,000

= 0.5 or 50%

If sales volume increases by 30%,

Revised sales:

= Total sales + 20% of Total sales

= $340,000 + (0.2 × $340,000)

= $340,000 + $68,000

= $408,000

Revised contribution margin:

= Revised sales × Contribution margin ratio

= $408,000 × 50%

= $204,000

4 0
1 year ago
Suppose an investment broker offers to sell you a financial asset for $850. You will receive only one payment of $1,000 five yea
avanturin [10]

Answer:

The interest rate is 0.06%

Explanation:

Step one :

Given data

final amount $1,000

initial principal balance $850

annual interest rate=?

time (in years)=5 years

Step two:

Applying the

Simple interest/Formula

A = P (1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

Plugin our data into the formula We have

1000=850(1+r*5)

1,000=850(1+5r)

Opening bracket we have

1,000=850+4,250r

Colleting like terms we have

1000-850=4250r

250=4,250r

Dividing both sides by 4,250 we have

r=250/4250

r=0.058

Hence the interest rate is 0.06%

6 0
1 year ago
Read 2 more answers
Adrianna works as a purchasing manager at a trading firm and earns a salary of $60,000. She has deductions of $3,000 and tax cre
Musya8 [376]

Adrianna's salary $60,000

She has deductions of $3,000

Tax credits of $5,000

Annual tax of $6,000

What is her annual disposable income?

To solve, subtract all the deductions or money leaving her salary and add the credits she receives yearly.

$60,000 - $3,000 = $67,000

$57,000 + $5,000 = $62,000

$62,000 - $6,000 = $56,000

Adrianna's annual disposable income is $56,000.

6 0
2 years ago
.......Oferta y Demanda .........
Alexandra [31]

Answer:

En tu país se ha desatado un problema de salud asociado a un coronavirus. Como resultado de la situación, el número de consumidores que desean adquirir desinfectante de manos ha aumentado en esa temporada.

La demanda por desinfectante aumenta, mientras que la oferta también aumenta pero no al mismo ritmo, ya que las empresas deben ajustar su producción y esto toma tiempo. Esto ocasiona que la cantidad de equilibrio sea menor a la demandada, lo que incrementa el precio del desinfectante.

La curva de demanda se mueve a la derecha (aumenta), mientras que la curva de oferta se mantiene.

Luego de un reciente fenómeno atmosférico, una gran cantidad de la cosecha de frutas fue destruida simultáneamente con la llegada de la alta temporada de eventos gastronómicos.

La oferta de frutas disminuye de forma drástica, al tiempo que la demanda aumenta. Esta baja cantidad y alta demanda ocasiona un gran aumento del precio de las frutas.

La curva de oferta se mueve a la izquierda (disminuye), mientras que la curva de demanda se mueve a la derecha (aumenta).

Los costos asociados al consumo de energía eléctrica en el proceso de producción se han reducido considerablemente, en conjunto con la entrada al mercado de 10 nuevas empresas dedicadas a la producción de alimentos.

La oferta de alimentos aumenta debido a la nuevas empresas, y a los menores costos de energía. La demanda no necesariamente aumenta al mismo ritmo, lo que genera que la oferta probablemente sea más alta que la demanda, haciendo que el precio de los alimentos sea más bajo.

La curva de oferta se mueve a la derecha, y la de demanda se mantiene estable.

3 0
1 year ago
Leslie works as customer service representative for Lighthouse Point Lanterns. Her job is to fulfill customer orders and answer
GenaCL600 [577]

Answer:

a performance reward.

Explanation:

A performance reward is a type of employee reward system. Companies generally reward employees in an attempt to motivate them to work more, harder or more efficiently. E.g. a company may reward salespeople that close 100 sales per week, regardless of the type of sales made. This type of reward is based on the gross amount of work carried out by the employee.

In Leslie's case, she is being rewarded for being an efficient employee. The parameter for measuring her efficiency is that 80% of the test calls that she makes are handed properly. She is not rewarded on the number of test calls, but instead on how she handled them.

4 0
1 year ago
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