The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percent)? The rental price of capital?
Profit Maximization is the process that a firm uses to establish where the best output and price levels are, in order to maximize its return. There are two primary methods that can be used to establish profit maximization. One method is the Marginal Revenue minus the Marginal Cost (MR-MC) method. When utilizing this method economists assume that profit would be at its highest when MR and MC are equal, which denotes that for every item made MP=MR-MC. When / if MR is higher than MC then MP would result in a profit for Company A.
This ratio tells us how effectively and efficiently a company is using its fixed assets to generate revenues. | Total asset turnover=Sales/Total assets | | The total asset turnover ratio measures the ability of a company to use its assets to efficiently generate sales.
Their cash flow is the net income plus depreciation. C. Now, suppose the company changes its depreciation calculation procedure (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s net income, total profit margin, and cash flow? The depreciation will be $3,000,000. Their total revenue will be subtracted from their total expense which will be their net income.
1. Provide the definitions of throughput, inventory and operational expense given in The Goal. How do they compare with the traditional definitions? Do you find them useful, and why? Throughput is the rate at which the system generates money through sales while inventory is all the money that the system has invested in purchasing things which it intends to sell.
B. should always be equal to net realizable value less a normal profit margin. C. should always be equal to net realizable value. D. is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin. 16) The retail inventory method is based on the assumption that the A. ratio of cost to retail changes at a constant rate. B. proportions of markups and markdowns to selling price are the same.
Outlays are securities that are used to make purchases; or to improve an asset that is already held and that will increase the value of Caledonia Products for a length of time. Caledonia Products has allocated $100,000.00 to get production started for the company; $7,900,000.00 to purchase a new operating facility along with equipment. The cost of equipment and plant, plus shipping and installation charges, plus net working capital equals a project’s initial outlay. The cost for shipping and installation is an additional $100,000.00 resulting in $8,100,000.00 in initial cash flow. These are the main examples of capital outlay.
EGT1 TASK 1 McConnell, Brue and Flynn define Marginal Revenue as “the change in total revenue that results from the sale of one additional unit of a firm’s product; equal to the change in total revenue divided by the change in the quantity of the product sold.” (McConnell, Brue and Flynn, 2012). When we look at the relationship between total revenue and marginal revenue we can see that it is purely a mathematical relationship. The formula that is used to determine Total Revenue is the following; Total Revenue = Price X Quantity, (TR = P X Q). McConnell, Brue and Flynn also define Marginal Cost they state that it is “the extra cost of producing one more unit of output; equal to the change in total cost divided by the change in output.” (McConnell, Brue and Flynn 2011). The marginal cost and total cost is directly related to each other.
Define the price elasticity of demand and show how it is calculated. Answer: The units-free measure of the responsiveness of the quantity demanded of a good to a change in it s price when all other influences on buying plans remain the same. 3. What is the total revenue test? Explain how it works.
Changes of Demand and the Effect on Gas Prices Law of Demand The law of demand states that the cost of an item is related to the demand for the item. In essence, this means that the more the cost