Course | ECN-D101-3003-Fall2013-Principles of Macroeconomics | Test | Elasticities | Started | 10/3/13 10:33 PM | Submitted | 10/3/13 11:17 PM | Status | Completed | Attempt Score | 100 out of 100 points | Time Elapsed | 43 minutes. | Instructions | | * Question 1 10 out of 10 points | | | We would expect: . A) the demand for Coca-Cola to be less elastic than the demand for soft drinks in general. B) the demand for Coca-Cola to be more elastic than the demand for soft drinks in general. C) no relationship between the elasticity of demand for Coca-Cola and the elasticity of demand for soft drinks in general.
How many fields should Henry & Sons plant this spring to maximize profits and what determines this? Henry & sons should plan only one field or more than 8 fields to maximize the profit. This shows that the variable cost is too high which reduce the profit margin for the Henry & Sons. It also shows that the marginal revenue is same for all the quantity they produce. 2.
All of them would be saved. If using numbers in 1988 for estimate, (5,766,000+6,532,000)*434% = $53,373,320 would be saved. Bridgeton accumulates all manufacturing overhead costs into one cost pool, and use direct labor dollar cost as the allocation measure to apportion the overhead costs in the cost pool. Unlike direct labor and direct material costs that can be traced to specific products, overhead costs could be administrative and manufacturing related so that not all of them are involved in ACF’s production. Therefore, there isn’t a high degree of correlation between the units produced and the amount of manufacturing overhead used.
In the short run, what happens to the supply of wheat? ANS. The supply of wheat would be expected to increase since it has become cheaper to produce, providing greater profit margins than before at alternative prices. b. In the short run, what happens to the demand for wheat?
ANALYSIS Previous analyses evaluating the project on incremental, facilities-used, and fully allocated basis provide an inaccurate picture of the project. Analyzing the Super project is not a management decision but rather a question of accounting for investment decisions. A cash flow analysis (Figure 1) over ten years of the Super project combines and addresses the issues raised in the three analyses to form a more accurate representation of the cost of the project to General Foods. While the original financial evaluation of the project contained many pieces of information, the relevant cash flows in evaluating the Super project should be net sales, COGS, depreciation, overhead, advertising expenses, erosion, taxes, changes in net working capital, investment credits, startup costs, and opportunity costs. Opportunity costs (amortized over ten years) are accounted because the Jell-O building and agglomerator could potentially provide future income in the form of Jell-O expansion.
Interest rate goes up, Coca-cola have no reason to call back the Series A notes. But also in this period, the investors who hold the warrant have the right to buy the $1000 amount of Series B at 100% par value, without surrendering the series A. Just need the cash! It’s just like a new
In valuing a company whose CFROI is higher than average, HOLT assumes those returns will gradually fade toward the market norm because of competitive pressures. The rate of fade is determined in part by the volatility of the company's historic CFROI levels. That's important because HOLT's valuation
The consumers are risk-neutral: if they have probability p of getting a high quality product, they value this prospect 14p + 8(1 - p) Each type of manufacturer can produce the product at a constant unit cost of 11. a) Suppose that the sale of low quality calculators is illegal, so that the only items allowed to appear on the market are of high quality. What will be the equilibrium price? b) Suppose that there are no high quality sellers. How many low quality calculators would you expect to be sold in equilibrium? c) Could there be an equilibrium in which equal (positive) quantities of the two types of calculators appear in the market?
Short-run cost functions should be estimated using data for which the level of usage of one or more of the inputs is fixed. Usually time-series data for a specific firm are used to estimate short-run cost functions. Analysts should be careful to adjust the cost and input price data (which are measured in dollars) for inflation and to make sure the cost data measure economic cost. The following are the two possible problems that may arise when measuring cost for short-run cost estimation: Correcting data for the effects of inflation Economic analyses often use data from two or more calendar years. Price inflation causes the value of a dollar to fall over time, and so the same dollar amount in two different years will usually represent different amounts of purchasing power.
Variable costing does not include production volumes and income changes because of sales volume. Although there are several pros and cons to each costing system, we will discuss those in variable costing next because it is the system discussed by the executive committee. The company’s controller approved of Silver’s suggestion and stated that the system would eliminate the time-consuming effort of allocating fixed overhead to individual products as well as eliminating the ensuing arguments. This would allow the overhead costs to be fixed and consistent each month making the costs independent of production. Segregating the cost of materials, direct labor, and variable overhead from fixed overhead costs, management’s cost control efforts would be enhanced.