Reference no: EM13151639
3) Suppose you are the owner of a movie theater in Palouse, WA and have booked a summer box office hit into your single theater. You are now planning the length of its run. Your share of the
film’s projected box-office is R = 10W – 0.25W2, where R = revenue ($1,000) and W is the number of weeks that the movie runs. The average operating costs of your theater is AC = MC =$4 thousand per week.
a. To maximize your profit, how many weeks should the movie run? What is your profit?
b. You realize that your typical movie makes an average operating profit of $1.5 thousand per week. How does this fact affect your decision in part (a), if at all? Briefly explain.
c. In the last 25 years, stand-alone movie theaters have given way to cineplexes with 4 to 10 screens and megaplexes with 10 to 30 screens under one roof. During the same time, total annual movie admissions have barely changed. What cost factors can explain this trend? In addition, what demand factors might be also be relevant?
d. The film’s producer anticipated an extended theater run (through Labor Day) and accordingly decided to move back the DVD release of the film from Thanksgiving to New
Year’s Day. Does the decision to delay make sense? Please explain.
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Large negative number if there is negative correlation
: The sum of the cross-products of Z scores gives you a large positive number if there is a positive correlation and a large negative number if there is a negative correlation.
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What is the initial cost of the project
: The net present value of a project's cash inflows is $9,456 at a 7 percent discount rate. The profitability index is 1.16 and the firm's tax rate is 35 percent. What is the initial cost of the project?
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Entry to record the transaction basics
: The Ice Corporation issues 30,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $1,800,000 and a credit or credits to:
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Explain the molarity of magnesium acetate
: calculate A) the molarity of sodium B) the molarity of magnesium acetate C) the molarity of acetate ion in each solution
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What demand factors might be also be relevant
: During the same time, total annual movie admissions have barely changed. What cost factors can explain this trend? In addition, what demand factors might be also be relevant?
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Find expense be considered unusually high by the company
: If a member of the sales force submits an entertainment expense (dinner cost for four) of $190, should this expense be considered unusually high (and possibly worthy of investigation by the company)?
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Amount of taxable income
: USCo, a domestic corporation, earns $50 million of taxable income from U.S. sources and $10 million of taxable income from foreign sources. What amount of taxable income does USCo report on its U.S. tax return?
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What is the incremental cost of funds on asset b
: Suppose you have three indivisible assets, A, B and C with internal rates of return 2%, 5% and 10% respectively and initial costs of $1, $4, $5. Suppose you have $6.5 at 1% and can borrow at 8%. What is the incremental cost of funds on asset B?
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Explain the mass percent of an element in a compound
: The mass percent of an element in a compound is the mass of the element (total mass of the element's atoms in the compound) divided by the mass of the compound
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