Installed a new machine to make particular type of part

Assignment Help Business Economics
Reference no: EM13861948

Suppose you own a specialized auto parts manufacturer. You purchase and have installed a new machine to make a particular type of part. The price of the machine plus installation is $300,000. Once the machine is purchased and installed it has no resale value, but it does not wear out. Other costs of making the parts are $200 per unit.

Suppose you are able to make and sell 1000 units at $225 each. Let the market rate of interest be 10%.

a) If you have already purchased the machine, should you go ahead and make and sell the 1000 units or should you close your operation?

b) If you have not yet purchased the machine and anticipate selling only 1000 at a price of $225, should purchase the machine and produce?

c) Is there a difference in your answers to (a) and (b)? Explain.

Reference no: EM13861948

Questions Cloud

Legal services firm processes routine documents for law firm : A legal services firm processes routine documents for law firm clients in Ohio and Kentucky. Since Indiana law and procedures are similar, it is considering adding clients from that state. In making this decision, the company “allocates” one-third of..
Create a use case graphic rendering that shows all actors : Using Microsoft Visio or an open source alternative such as Dia, create a use case graphic rendering that shows all actors and all use cases for the RMO CSMS marketing subsystem.Note:The graphically depicted solution is not included in the required p..
Total variable costs : Consider a firm with the following total variable costs (TVC). If the firm has already purchased the equipment, answer the following: (i) if the firm chooses to operate, what is its best possible output?
Task is to design a display with three leds : Your task is to design a display with three LEDs that has the following four modes of operations: Mode 1: Left to right operation 1 - left LED switches ON and then switches OFF, followed by the middle LED, and then the right LED. This sequence repea..
Installed a new machine to make particular type of part : Suppose you own a specialized auto parts manufacturer. You purchase and have installed a new machine to make a particular type of part. The price of the machine plus installation is $300,000. If you have already purchased the machine, should you go a..
Gui library to convert celsius to fahrenheit : Write a program in Java using Swing GUI library to convert Celsius to Fahrenheit. If the input is in Celsius, the program can output equivalent Fahrenheit. Both the input and output should use Swing GUI program. Both the input and output should use S..
Gui library to convert celsius to fahrenheit : Write a program in Java using Swing GUI library to convert Celsius to Fahrenheit. If the input is in Celsius, the program can output equivalent Fahrenheit. Both the input and output should use Swing GUI program. Both the input and output should use S..
Viewing system information : Viewing system information (Screenshot and written response required)View the system information (i.e., operating system, processor, memory) of the computer. (Help: From the Control Panel, select System and Security, and then select System; This navi..
What is shops average cost without taking the new order : Consider a copy shop with annualized fixed costs of $1000 and variable cost of $0.03 per page. The shop presently has orders for 100,000 copies at a price of $0.05 per page. What is the shop’s average cost (AC) without taking the new order? Is it les..

Reviews

Write a Review

Business Economics Questions & Answers

  What is the dominant source of capital funding in the us

What is the dominant source of capital funding in the United States? Given this result and the fact that most corporations are net borrowers, what decisions must most managers face in order to address this financial deficit?

  Illustrate what action do you suppose cigarette company

The damage (to cigarette makers) is generally under control." Illustrate what action do you suppose the cigarette companies took to avoid bankruptcy.

  What factors can contribute to unemployment

For this week's assignment you will create a financial plan to be prepared for economic fluctuations. What factors can contribute to unemployment? How can technology lead to greater unemployment, or is it a benefit to the economy? Can inflation cause..

  Month real interest rate-exogenous change equilibria

Use the following data table to determine the equilibrium real interest rate after certain factors change: Month Real Interest Rate (%) Loanable Funds (trillions of $) Exogenous Change Equilibria (increases, decreases, or no change)

  Qelectoral college system take a country named know land

q.electoral college system take a country named know land that has. suppose there are 9 small states in know land where

  Industry is highly concentrated-firm concentration ratio

Which industry is more highly concentrated: one with a Herfindahl index of 1,200 or one with a four-firm concentration ratio of 55 percent?

  What is the total amount that the bank can create

What is the change in the total amount that J & R National Bank can loan out? Explain.ii. What is the total amount that the bank can create? Explain.

  The three primary systems for allocating resources

The three primary systems for allocating resources are

  Ice storms are net benefit to the economy

Consider the following statement. "Winter ice storms that sometimes hit Chicago are good for the economy. They create many jobs to remove downed limbs and replace trees and bushes." Do you agree that ice storms are a net benefit to the economy? To an..

  In which instance will total revenue decline

In which instance will total revenue decline?

  Describes the concept of laissez-faire

Which of the following best describes the concept of laissez-faire?

  Qa firm has developed a new product for which it has a

q.a firm has developed a new product for which it has a registered trademark. the firms market research department has

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd