What would be the additional annual revenue for method a

Assignment Help Econometrics
Reference no: EM13231955

A firm is considering two different methods of solving a production problem. Both methods are expected to be obsolete in six years. Method A would cost $80,000 initially and have annual operating costs of $22,000. Method B would cost %52,000 initially and have annual operating costs of $17,000. The salvage value realized with method A would be $20,000 and with method B would be $15,000. Method A would generate $16,000 of revenue per year more than Method B. Investments in both methods depreciate as a 5 year MACRS property class. Marginal tax = 40%. MARR=20%. What would be the additional annual revenue for method A such that the firm would be indifferent in its choice of method?

Reference no: EM13231955

Questions Cloud

Sael electronics with printed circuit : BUYU Manufacturing has been contracted to provide SAEL Electronics with printed circuit and motherboards (PC) boards under the following term
Calculate the marginal opportunity cost of each combination : Suppose a second nation has the following data. Plot the PPC, and then determine which nation has the comparative advantage in which activity. Show whether the two nations can gain from specialization and trade.
Describe the components of the ethernet frame in detail : Describe the components of the Ethernet frame in detail
State the b oxidation pathway are similar to three reactions : The first three reactions of the b oxidation pathway are similar to three reactions in the Kreb's cycle. Which three and why are they similar
What would be the additional annual revenue for method a : A firm is considering two different methods of solving a production problem. Both methods are expected to be obsolete in six years. Method A would cost $80,000 initially and have annual operating costs of $22,000. Method B would cost %52,000
Technology and innovation : Technology and Innovation
Define the hypothesis test : A machine is designed to fill jars with 16 ounces of jelly beans. A buyer suspects that the machine is not filling the jars completely, Clearly identify the necessary steps in your hypothesis test
Compute the mode for these sample data : Given this sample data, suppose the manager wishes to give discounts to golfers inthe top quartile. What should the minimum number of rounds played be to receive a discount?
Prepare a project task list include all the detailed tasks : You are the data transformation specialist for the first data warehouse project in an airlines company. Prepare a project task list to include all the detailed tasks needed for data extraction and transformation.

Reviews

Write a Review

Econometrics Questions & Answers

  How should toyota market itself to regain consumer trust

oyota's announcements at the beginning of 2010, however, suggested that the real culprit was a defective gas pedal. This resulted in many calls for an investigation, as the initial claim about the carpeting was seen as apparent camouflage for a more ..

  How much surplus do producers receive

The supply curve for product X is given by QXS = -340 + 10PX . a. Find the inverse supply curve. P = + Q b. How much surplus do producers receive when Qx = 350? When Qx = 1,000?

  By how much does output increase or decrease

Given the following information calculate the multiplier effect on Y, i.e. by how much does output increase or decrease by (Y), if Unless told otherwise, assume other factors are held constant. For example if you are told that only government spend..

  Determine profit maximizing level of production

Why is it important for a profit maximizing firm to consider market structure in determining the price and output of its product or service b. How do you determine the profit maximizing level of production in terms of price, marginal revenue and m..

  What is the predicted price of an ocean view unit

A researcher has developed the following regression equation to predict the prices of luxurious Oceanside condominium units, Picture , where Price = the price of a unit (in $thousands), Size = the square footage (in square feet), View = a dummy varia..

  How many full-time workers should the firm employ

If the current stock of capital is fixed at 250 units, how many full-time workers should the firm employ if the weekly salary of each full-time worker (w) is $400 per week Compute the firm's level of output and profits per week in this short-run e..

  Compute the one-year forward exchange rate

the exchange rate between US-dollar and the euro is exactly 2 $/euro. At that time, a one-year US treasury bill yield an interest rate of 5%, while a similar German treasury bill yield 3%. Inflation during the year is expected to be 3% in the USA ..

  Explain what happens to the coefficient on coll

Explain what happens to the coefficient on coll in terms of its magnitude and its statistical significance when points , rebounds , and assists are added to the regression. Why do you think this happened?

  Which firms are producing and what is the equilibrium price

A competitive industry consists of 6 type A firms and 4 type B firms . Each firm of type A operates with the supply curve \(Q^{Supply}_{A} = ^{^{-} 10+ P, when P > 10}_{0, when P

  Describe what is the governments tax revenue

Economic 101 The supply of luxury boats is perfectly elastic, the demand for luxury boats is unit elastic, and with no tax on luxury boats, the price of luxury boats is $1 million and 240 luxury boats a week are brough. now luxury boats are taxed ..

  Determine how much profit will the monopolist make

A monopolist faces a demand curve given by: P = 105 - 3Q, where P is the price of the good and Q is the quantity demanded. The marginal cost of production is constant and is equal to $15. There are no fixed costs of production.

  Calculate the net cash flow for the year 2015

You went on a trip to Tombstone, Arizona and stopped into a gift shop, where you began talking with the owner. You find out that she needs to apply for a small business loan and needs to calculate the net cash flow for the year 2015.

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