Nationalization of industries so pricing is at marginal cost

Assignment Help Financial Management
Reference no: EM131087912

Why are government imposed "average cost pricing" and "nationalization of industries so pricing is at marginal cost" both second best outcomes to the competitive markets? P=MC=min ATC long run equilibrium?

Reference no: EM131087912

Questions Cloud

According to the gordon growth model : According to the Gordon growth model, what is an investor's valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor's required return..
Create strategic plan : You have been asked to create a strategic plan for a new Renal Dialysis Center that will open in six months. Your plan needs to include and expand upon the six major components. Mission statement Vision statement Values Goals Objectives Action plan Y..
Fixed asset turnover and total asset turnover ratios : Thompson Corp has a NPM of 11.5%. They reported earnings after tax of $632,500. If they had net fixed assets of $1,500,000 and current assets of $750,000, what are their fixed asset turnover and total asset turnover ratios?
Driven per year for leasing and buying to cost the same : How many kilometers must a car be driven per year for leasing and buying to cost the same? Use 10% interest and year-end cost. Leasing: $0.20 per kilometer Buying: $5000 purchase cost, 3-year life, salvage $1200. $0.04 per kilometer for gas and oil, ..
Nationalization of industries so pricing is at marginal cost : Why are government imposed "average cost pricing" and "nationalization of industries so pricing is at marginal cost" both second best outcomes to the competitive markets? P=MC=min ATC long run equilibrium?
What is the break-even point in dollar sales : Donna Karan produces swimming trunks. The average selling price of one of the company's trunks is $40.18. The variable cost per unit is $18.84, and Donna Karan has average fixed costs per year of $38198. What is the break-even point in dollar sales?
What is the profitability index for each project : Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$419,000 –$37,000 1 47,000 19,800 2 59,000 13,900 3 76,000 15,600 4 534,000 12,400. What is the payback period for each project?  What is the NPV for each pro..
Explain how the terms of the option contract change : Consider an exchange-traded call option to buy 400 shares with a strike price of $30 and maturity in four months. Explain how the terms of the option contract change when there is: a. 20% stock dividend b. 20% cash dividend c. 3-for-2 split
Bonds are selling at par value-what is the cost of equity : Johnson Tire Distributors has an unlevered cost of capital of 12 %, a tax rate of 34 %, and expected earnings before interest and taxes of $1,600. The company has $2,700 in bonds outstanding that have a 7 % coupon and pay interest annually. The bonds..

Reviews

Write a Review

Financial Management Questions & Answers

  Pretax cost savings-computer-based order entry system

Your firm is contemplating the purchase of a new $565,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $57,000 at the end of that time. You will be able to reduce wo..

  What is the profitability index for each project

What is the payback period for each project? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Payback period Project A years Project B years. What is the profitability index for each project? What is the..

  Currently pays an annual dividend

Sam Houston Inc. currently pays an annual dividend of $5. The dividend is expected to grow at a constant rate of 5%. If the interest rate is 10%, what is the current stock price?

  A financial planning organization

May an attorney allow a financial planning organization to refer its members to him for preparation of wills and trusts and accept payment of part or all of his fee from the organization?

  With no corresponding increase in current liabilities

Provo Corporation had cash revenues of $14,000,000, cash operating expenses of $5,000,000, and depreciation and amortization of $1,000,000 during 2015. The firm purchased $650,000 of equipment during the year while increasing its inventory by $300,00..

  Question regarding the financial performance

If you are successful with your financial performance and are paid a bonus based on profitability , which measure should be used? Carefully review the Grading Rubric for the criteria that will be used to evaluate your assignment.

  Maximum amount anyone should pay to purchase share

Phillips 66 announced that the next annual dividend will be $1.75 a share, and that all dividends after that will decrease by 1.5 percent annually. What is the maximum amount anyone should pay to purchase a share of this stock today if one requires a..

  Whats wrong with using payback period

How can options sell for more than their exercise value and whats wrong with using payback period? What should we use instead? Why?

  Expected to produce revenue-annual cash flow from operations

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investment will consist of $2.00 million for land and $10.00 million for trucks..

  Natural gas producing firm is exposed to fluctuations

A natural gas producing firm is exposed to fluctuations in market prices of natural gas. If market conditions are favorable (high gas prices) the firm will realize a pre-tax operating profit of $300 million. If market conditions are unfavorable, then..

  First find the market risk premium

Stock A's stock has a beta of 1.30, and its required return is 12.00%. Stock B's beta is 0.80. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

  What is the future value of these investment cash flows

Trigen Corp. management will invest cash flows of $539,322, $1,060,489, $497,845, $818,400, $1,239,644, and $1,617,848 in research and development over the next six years. If the appropriate interest rate is 7.36 percent, what is the future value of ..

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