Which job in the Finance career cluster is ideal for a person with a master’s degree?

Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason. a. The p

jasenka [17]

Answer:

a. The purchase price of the old computer when replacing it with a new computer with improved features - Irrelevant cost

Sunk costs are considered irrelevant and the price of the old computer is a sunk cost as it has already been incurred.

b. The cost of renovations when deciding whether to build a new office building or to renovate the existing office building - Relevant

The cost of renovations will help the company decide which alternative is cheaper between building a new office or renovating.

c. The original cost of the current stove when selecting a new, more efficient stove for a restaurant. - Irrelevant

Like the first, this is a sunk cost so it is irrelevant.

d. Local tax incentives when selecting the location of a new office complex for a company’s headquarters. - Relevant

Local tax incentives could reduce cost of operation so is relevant when choosing headquarter location.

e. The fair market value (trade-in value) of the existing forklift when deciding whether to replace it with a new, more efficient model. - Relevant

The existing machine can be traded in for part of the cost of a new one using its market value to reduce the cost of the new one. It is relevant.

f. Fuel economy when purchasing new trucks for the delivery fleet. - Relevant.

Higher fuel economy can reduce cost of transportation so is a relevant cost.

g. The cost of production when determining whether to continue to manufacture the screen for a smartphone or to purchase it from an outside supplier. - Relevant.

This is a relevant cost because the it will help the company decide the cheaper alternative.

h. The cost of land when determining where to build a new call center. - Relevant.

Some land will be in areas that will have higher real estate prices. Your preferred cost of land will help determine which areas to look for locations in.

i. The average cost of vehicle operation when purchasing a new delivery van. - Relevant.

If this cost is too high it will increase expenses. It is a relevant cost to note for cost maximisation.

j. Real estate property tax rates when selecting the location for a new order processing center. - Relevant

Real estate taxes need to be known so that cost estimation can be made on the order processing center.

6 0

2 years ago

Suppose that the inverse demand for San Francisco cable car rides is pequals20minusStartFraction Upper Q Over 1000 EndFraction

MariettaO [177]

Answer: The revenue-maximizing price is $10.

Explanation:

Given that,

Inverse demand function: P = $20 - \frac{Q}{1,000}$

Where,

P - Price per ride

Q - Number of rides per day

Revenue(R) = P × Q

= $20 - \frac{Q}{1,000}$ × Q

= $20Q - \frac{Q^{2} }{1,000}$

Differentiating 'R' with respect to Q for calculating Marginal revenue(MR):

MR = $20 - \frac{Q}{500}$

Here, MC = 0

MR = MC

$20 - \frac{Q}{500}$ = 0

Therefore, Q = 10,000

P = $20 - \frac{Q}{1,000}$

= $20 - \frac{10,000}{1,000}$

= $10

Hence, the revenue-maximizing price is $10.

5 0

1 year ago

On April 30, Gomez Services had an Accounts Receivable balance of $33,400. During the month of May, total credits to Accounts Re

swat32

Answer:

The amount of credit sales during may is $62,400.

Explanation:

credit sales = accounts receivable balance on 31 may + total credits to accounts receivable - accounts receivable balance on 30 april

= $27,000 + $68,800 - $33,400

= $62,400

Therefore, the amount of credit sales during may is $62,400.

7 0

1 year ago

At the beginning of the current period, Kingbird Corp. had balances in Accounts Receivable of $192,800 and in Allowance for Doub

Delicious77 [7]

Kingbird Corp

A.

Dr Account Receiveable $722,500

Cr Sales Revenue $722,500

B.

Dr cash $708,940

Cr Account receivable $708,940

C.

Dr Bad debt expense $14,220

($22,740-$8,520)

Cr Allowance for Doubtful Account $14,220

3 0

1 year ago

Suppose that the investment demand curve in a certain economy is such that investment declines by $130 billion for every 1 perce

AlekseyPX

Answer:

50 billion

Explanation:

Investment declines by $130 billion for every 1 percentage point increase in the real interest rate.

Decline in Investment because of higher real interest rate:

= 2 × 100

= $200 billion

Increase in Investment because of higher expected rate of return:

= 1 × 150

= 150 billion

Total decline in investment:

= -200 + 150

= 50 billion

Therefore, 50 billion of investment will be crowding out.

8 0

1 year ago