Marginal cost Essay Examples

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Marginal Cost Essay

8136 words - 33 pages CHAPTER 26 Marginal Costing and Cost Volume Profit Analysis Meaning Marginal Cost: The tenn Marginal Cost refers to the amount at any given volume of output by which the aggregate costs are charged if the volume of output is changed by one unit. Accordingly, it means that the added or additional cost of an extra unit of output. Marginal cost may also be defined as the "cost of producing one additional unit of product." Thus, the concept marginal cost indicates wherever there is a change in the volume of output, certainly there will be some change in the total cost. It is concerned with the changes in variable costs. Fixed cost is treated as a period cost and is transferred to Profit and VIEW DOCUMENT
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Admin Essay

659 words - 3 pages . The variable cost of a product is usually only the direct materials required to build it. Direct labor is rarely completely variable, since a minimum number of people are required to crew a production line, irrespective of the number of units produced. The Marginal Cost Calculation ABC International has designed a product that contains $5.00 of variable expenses and $3.50 of allocated overhead expenses. ABC has sold all possible units at its normal price point of $10.00, and still has residual production capacity available. A customer offers to buy 6,000 units at the company's best price. To obtain the sale, the sales manager sets the price of $6.00, which will generate an incremental profit VIEW DOCUMENT
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Egt! Task 1 Essay

699 words - 3 pages product.” (McConnel, 2012) Total revenue is not the profit that is made from selling a product. Total revenue is the money that was made when the product was sold to a consumer. Once total revenue is obtained, profit is determined by deducting the total cost from the total revenue. The relationship can be described as follows, “total revenue is the change that occurs in marginal revenue when one or more units of goods or services are produced” (McConnel, 2012). A change in quantity, whether this change is negative or positive, is when marginal revenue occurs. “Marginal Revenue is the change in total revenue that results from selling one or more unit of output.” (McConnell, 2012) An VIEW DOCUMENT
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Task1 Essay

968 words - 4 pages EGT1 Task 1 – Marginal Analysis The profit calculation of total revenue and total costs is Profit (P) equals total revenue (TR) minus total costs (TC) and focuses on maximizing this difference. Profit will be maximized when the total revenue, or the amount they would receive by selling that particular widget exceeds the total cost, or the costs associated with making this widget by the greatest amount. The greatest difference between these two is considered the profit.The profit calculation of marginal revenue to marginal costs is different where the company will compare the marginal revenue (MR) they would receive from selling one more widget to the marginal cost (MC) of producing that VIEW DOCUMENT
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Communication Essay

596 words - 3 pages cost and earn monopoly profit, which might more than compensate for the foreign market losses. Fig. illustrates how the price discrimination is possible by the monopolist in spatially separated markets. In protected domestic market, this monopolist faces downward sloping demand curve ARD The corresponding marginal revenue curve MRD is also downward sloping. However, die demand curve ARF of the concerned firm in the foreign market is horizontal straight line at the level of OPF price, as here; it is one among large number of competitors. In the foreign market, its marginal revenue curve MRF coincides with the demand curve ARF due to perfect competition there. On account of perfect VIEW DOCUMENT
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Econ Essay

5448 words - 22 pages Suggested Exercises’ Answers (Please note that these questions are from “Problems and Applications” part of the chapters, which are at the very end of the chapters) CHAPTER 14 Q1. a. Profit is equal to (P – ATC) × Q. Therefore, profit is ($10 – $8) × 100 = $200. b. For firms in perfect competition, marginal revenue and average revenue are equal. Since profit maximization also implies that marginal revenue is equal to marginal cost, marginal cost must be $10. c. Average fixed cost is equal to AFC /Q which is $200/100 = $2. Since average variable cost is equal to average total cost minus average fixed cost, AVC = $8 - $2 = $6. d. Since average total cost is less than marginal VIEW DOCUMENT
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Boston Transplant Center Essay

319 words - 2 pages CASE 9 QUESTIONS BOSTON TRANSPLANT CENTER Marginal Cost Pricing Analysis 1. What is the marginal cost estimate of the Phase 4 hospital services, assuming that 60 percent of the designated costs are fixed and the remaining costs are variable? 2. Create the relevant underlying cost structure (cost behavior) equation. What is the relevant range for this structure? How does the structure change if the contract is expected to bring more than 30 additional transplant patients? 3. What fixed cost proportion is implied if the price for Phase 4 hospital services is set at $90,000? 4. Now assume that the fixed cost proportion is only 50 percent. What price must be set to cover variable costs VIEW DOCUMENT
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Business Proposal Essay

1434 words - 6 pages the printed word for text materials and creates a file with the option of reading it digitally or listening to it with a realistic synthetic voice. In addition, Will Bury know that he has free access to books no longer under copyright protection, and he figures he can pay a royalty fee of $5 per title for copyrighted books that greatly will expand his catalog. So far, he has limited himself to English-language books but is working on a language translation option as well. The purpose is to create a business proposal to improve the existing goods and services for Will Bury’s new product. In this paper the subject to discuss is profit-maximizing and increasing revenue. Marginal cost VIEW DOCUMENT
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Bus 640 Essay

803 words - 4 pages Appalachian Coal Mining believes that it can increase labor productivity and, there- fore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR 1,000 10P How much pollution reduction should Appalachian Coal Mining undertake? Appalachian Coal Mining decided to install additional capital equipment, they would decrease the amount of pollution that their company produces. This installation of VIEW DOCUMENT
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Cost Of Capital Essay

460 words - 2 pages 1. If a corporation has an average tax rate of 40 percent, what is the approximate, annual, after-tax cost of debt for a 15-year, 12 percent, $1,000 par value bond, selling at $950? Flotation costs are 1% of face value. The interest payments are semi-annual. PV = 950 – (1000*.01) = 940, FV = -1000, PMT = 120/2 = -60, N = 15 x 2 = 30, I = ? Before tax cost of debt = 6.46 x 2 = 12.92% After-tax cost of debt = 12.92(1-.4) = 7.75% 2. A firm has issued 10 percent preferred stock, which sold for $100 per share par value. The cost of issuing and selling the stock was $2 per share. The firm's marginal tax rate is 40 percent. What is the cost of the preferred stock? Cost of VIEW DOCUMENT
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Eco365 Final

1442 words - 6 pages Drivers, like to set daily income goals. How will affect their behavior on busy work days. Drivers will work less hours when compared to slow days Explanation: If drivers are busy, they will be making more on a per hour basis. This means they will meet their income goal faster and work less hours. 12) Where does a company get its demand for labor? Demand for its output Explanation: When demand for output is higher a firm will need hire more laborers to meet this demand. 13) A widget company wants to hire a fourth worker, but this will cost an extra $75 per day. The worker will be able to increase widget production from 60 to 75. What is the marginal of increasing output above VIEW DOCUMENT
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Introduction To Economics

1670 words - 7 pages usually called as ‘opportunity cost’ by economists (Gallahan 2004, p. 27). For instance, we choose to take a job rather than go to university. What is the opportunity cost or what do we give up for a job? We give up knowledge accumulation, a master degree and a better career opportunity for the rest of our life. Economics help us calculate accurately for opportunity cost so we can make a reasonable choice. Lesson 3: Rational people think at the margin ‘Economists use the term “marginal change” to describe a small incremental adjustment to an existing plan of action’ (Gans et al. 2012. p. 5). For example, you have already spent 500 dollars fixing your car transmission but it is still not working VIEW DOCUMENT
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Managerial Economics

3279 words - 14 pages , one must think about the costs of producing the extra output in order to determine whether the price decrease is profit maximizing. On the other hand, if an increase in price is justified from a revenue perspective, it must be the case that it is also justified from a profit perspective simply because total cost decreases as less output is produced and sold. Total revenue is maximized when selling an extra unit would cause your revenue to fall and selling a unit less would have also caused you to leave some revenue on the table rather than in your pocket. In other words, total revenue is maximized when marginal revenue is 0 and falling. Selling an extra unit would lead to negative VIEW DOCUMENT
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Marketing

758 words - 4 pages benefit of studying exceeds its marginal cost. This is also a prime example of opportunity cost. Opportunity cost is the fee of the most favorable unavoidable substitute. When an organization produces additional units of a certain product opportunity cost increases. Unfortunately, at equilibrium in the provisions of opportunity cost no units of goods are made if the product cost more to produce than it is valued. When opportunity cost exists increased prices are required to cover the increasing cost of production. The marginal cost of making and selling a certain good informs reflects the opportunity cost to produce the product. The production on a particular good requires that the VIEW DOCUMENT
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Monopoly Power

1008 words - 5 pages less people can afford to buy the product. They become allocatively inefficient as there is no need to set their prices equal to the marginal cost of supply. Firms in a competitive market take their price from the industry itself, but monopolies can set their own prices. And because there are no close substitutes available, consumers can't compare prices for a monopolist. Therefore, making it easier for them to set their prices above marginal cost. By charging a higher price, welfare reduces because the rise in price reduces consumer surplus. This can be gpresented by the t Consumer and ProducerSurplus Perfect Competitive Market and Monopoly The red area represents consumer surplus and VIEW DOCUMENT
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Gm545 Quiz 1

3375 words - 14 pages 1 1. Question: (TCO Quiz A) There is an increase in the cost of materials for producing bicycles. (4 pts.) What happens to bicycle supply? (6 pts.) What happens to bicycle demand? Your Answer: What happens to bicycle supply? When prices of materials required for unit production increase we will see a shift in the entire supply curve because costs of resources is one of the six detriments of supply. In this case as prices of materials increase the entire supply curve will shift to the left indicating that it will now cost more than it did before to achieve the same number of outputs. As this happens average costs of production increase as does marginal cost. What happens to bicycle VIEW DOCUMENT
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Econ

1874 words - 8 pages expands. When diseconomies of scale overtake economies of scale, long-run average cost rises as the firm rises. 6. What is the relationship between marginal cost and average cost? Briefly explain. - Marginal cost is the cost incurred in producing an additional unit of a product. It is the cost per unit of a product as against the total cost. It is therefore the variable cost of producing one more unit of a product.  Average total cost is the total cost of production at an activity level. it is the total cost of divided by the total production.  7. What distinguishes a firm's short run period from its long run priod? Briefly explain. - Short run period we would all have to go back VIEW DOCUMENT
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Dfdsfsdfsd

423 words - 2 pages Tutorial Questions - Cost of Capital 1. In the calculation of the WACC for a DCF (in a classical-tax system) why do we multiply the cost of debt by the marginal tax rate? 2. The following are the betas of the equity of four companies in the same industry and their debt/equity ratios. Company Beta Debt/Equity Ratio AFL 1.15 33.91% VFL 1.18 54.14% NRL 1.05 45.50% ARU 0.91 11.29% The corporate tax rate is 40%. A. Estimate the un-levered beta of each firm. What do the unlevered betas tell you about these firms? B. Assume that ARU is planning to increase its debt/equity ratio to 30%. What will its new beta be? 3. Kleenex has 1.13 billion VIEW DOCUMENT
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Microeconomics Quiz 2

669 words - 3 pages Name Tutor Course Date Microeconomics Quiz 2 Q.1 The purpose of a business is the provision of goods and services in exchange for money. The major business goal is making profits. Q.2 a) Marginal cost is the change in the firm's total cost resulting from one unit change in the output. b) Industry is a group of companies or firms that produce the same goods and services, for example, the oil industry c) Fixed cost is the expense incurred by a firm or business regardless of the level of output. This classification includes salaries, rent or the interest of the borrowed capital d) Separation of ownership and control is the delegation of duties by the financers of an VIEW DOCUMENT
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Eco 550 Mid Test Bank 1

2610 words - 11 pages histories of the patients. The optimal frequency should be where the marginal benefit of an additional pap-test: a. equals zero. b. is greater than the marginal cost of the test c. is lower than the marginal cost of an additional test d. equals the marginal cost of the test e. both a and b. ANS: D PTS: 1 22. Shirking of one’s duties is often encountered in team production settings because a. few individuals are well-intentioned b. teamwork is recognized as less significant than individual performance c. teammates face a dilemma posed by a dominant strategy to shirk d. reputation effects dominate in long-term teams e. teamwork can be less than the sum VIEW DOCUMENT
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Econ Solutions

2353 words - 10 pages Player 1 gets 5,000 – X Player 1 gets 10,000 - X Player 2 gets 5,000 – X Player 2 gets 0 Player 1 gets 0 Player 1 gets 5,000 Player 2 gets 10,000 Player 2 gets 5,000 X b. Taking the drug will be a dominant strategy for each player as long as X is less than 5,000. c. Making the drug safer (lowering X) raises the likelihood of taking the drug because it increases the payoff. in addition…. a. Assume that the health cost of the drug is equal to $1000 for one of the athletes, and $10000 for the other athlete. Draw the payoff matrix. Does either athlete have a dominant strategy? Are there any Nash Equilibria? If so, what are the N.E. strategies and payoffs? Player One’s Decision Take Drug VIEW DOCUMENT
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Donna Jamison

482 words - 2 pages capital ( WACC). Do you think Computrons growth added value? g. Jamison also has asked you to estimate Computrons EVA. She estimates that the after- tax cost of capital was 10% in both years. h. What happened to Computrons Market Value Added ( MVA)? i. Assume that a corporation has $ 100,000 of taxable income from operations plus $ 5,000 of interest income and $ 10,000 of dividend income. What is the companys federal tax liability? j. Assume that you are in the 25% marginal tax bracket and that you have $ 5,000 to invest. You have narrowed your investment choices down to California bonds with a yield of 7% or equally risky ExxonMobil bonds with a yield of 10%. Which one should you choose and why? At what marginal tax rate would you be indifferent to the choice between California and ExxonMobil bonds? VIEW DOCUMENT
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Bridgetown Industry

536 words - 3 pages - 1) As per the description, overhead items 1000, 1500, 5000, 9000, 12000, and 14000 are dependent on Direct Labor; and overhead items 2000, 3000, 4000, 8000, and 11000 are dependent on Direct Material. 2) Expected value of overhead (derived using regression) is a linear function of Direct Labor or Direct Material i.e no diminishing marginal effects. 3) The intercepts of regression equations represents fixed cost associated with that overhead and the slope of the equation represents variable cost. 4) It is assumed that the labor layoff during 1988-89 is captured in the direct labor cost. Remove Below items from the writeup - 1000 Wages and benefits for non-skilled hourly VIEW DOCUMENT
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Problem Set 4 Macro Economics

588 words - 3 pages | | | | D. $65,000 | | Reset Selection | Question 2 of 5 | 10.0 Points | Imagine that the total cost function is described by C(q)=64+(q^2)-12q. The marginal cost (MC) and average cost (AC) are | | | A. MC= 2q-12 AC= (64/q) + q - 12 | | | | B. MC= 64 AC= (64/q) + q - 12 | | | | C. MC= q-12 AC= 64 | | | | D. MC= 2q-12 AC= q - 12 | | Reset Selection | Question 3 of 5 | 10.0 Points | The previous technology (described by C(q)=64+(q)²-12q) exhibits diseconomies of scale whenever output is bigger than | | | A. 5 | | | | B. 6 | | | | C. 7 | | | | D. 8 | | Reset Selection | Question 4 of 5 | 5.0 Points | Last year VIEW DOCUMENT
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Econ Class

492 words - 2 pages rental rate for K is r = $1 and the wage rate for L is w = $4. a) In the short-run, the firm’s amount of capital equipment is fixed at K = $100. Find the firm’s short-run total cost function and the short-run average variable cost function. b) In the long-run, the firm can chose any size of equipment and labors. It can be shown that MPk =L 0.50/K0.5 and MPL =K 0.50/ L 0.5. Find the firm’s long-run average cost and long-run marginal cost function. . http://zh.scribd.com/doc/98745622/SM-PRESENTATION-ON-HTC-PPT#scribd VIEW DOCUMENT
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Econ

7170 words - 29 pages Refer to Table 14-4. For a firm operating in a competitive market, the average revenue is Question 6 options: $45. $30. $15. $0. Save Question 7 (1 point) At the profit-maximizing level of output, Question 7 options: marginal revenue equals average total cost. marginal revenue equals average variable cost. marginal revenue equals marginal cost. average revenue equals average total cost. Save Question 8 (1 point) Table 14-11 Suppose that a firm in a competitive market faces the following prices and costs: Price Quantity Total Cost $5 0 $3 $5 1 $5 $5 2 $8 $5 3 $12 $5 4 $17 $5 5 $23 Refer to Table 14-11. If the firm is producing 5 VIEW DOCUMENT
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Solution Manual Gitman

5096 words - 21 pages invested. LG 2, 4: The Managerial Finance Function and Economic Value Added a. Benefits from new robotics $560,000 Benefits from existing robotics 400,000 Marginal benefits $160,000 b. Initial cash investment Receipt from sale of old robotics Marginal cost c. Marginal benefits Marginal cost Net benefits $220,000 70,000 $150,000 $160,000 150,000 $ 10,000 1-2 d. Ken should recommend that the company replace the old robotics with the new robotics. Since the EVA is positive, the wealth of the shareholders would be increased by accepting the change. e. EVA uses profits as the estimate of cost and benefits. Profits ignore the important points of timing, cash flow, and risk, three important factors VIEW DOCUMENT
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Substitution And Income Effects Paper

1180 words - 5 pages Substitution and Income Effects Paper Bus 640 Managerial Economics Kiva Fowlkes Dr. Magadalena Cutler October 24, 2011 Introduction Consumer Behavior is how consumers allocate their money incomes among goods and services. Each consumer has preferences for certain of the goods and services that are available in the market. Buyers also have a good idea of how much marginal utility they will get from successive units of the various products they might purchase. However, the amount of marginal & total utility that the people will get will be different for every individual in the group because all individuals have different taste and preferences. According to Maurice & Thomas VIEW DOCUMENT
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Nike Case

2442 words - 10 pages Capitalization Model (EPS/ Price), we analyze their advantages and disadvantages and finally we conclude whether or not an investment in Nike is recommended. Our analysis suggests that Nike Inc.'s common stock should be added to the North Point Group's Mutual Fund Portfolio. I. The Weighted Average Cost of Capital and its Importance for Nike Inc. The Weighted Average Cost of Capital (WACC) is the average of the costs of a company's sources of financing-debt and equity, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every marginal dollar it finances. A firm's WACC is the VIEW DOCUMENT
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Final Proposal Paper

1936 words - 8 pages reduce my expenses, which is discussed under the methods to minimize costs for the product/service. How could you use the concepts of marginal cost and marginal revenue to maximize profits? What information do you need to determine this? Without this information, how would you make a decision? Since my business is not producing an actual product but a service, I am not expending too much in material supply and demands to perform my services. I do need to use the internet and other office equipment in order to operate my business so the profit earned needs to surpass the expenses of my business's expenses in order to have a profit. But to maximize my profits I will need to run the business VIEW DOCUMENT
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Finance Formula

4580 words - 19 pages flows in period t WACCt weighted average cost of capital in period t N number of cash flows NPV Net Present Value E (FCFt ) t t =1 (1 + WACCt ) N Copyright © ACIIA® page 9 Corporate Finance 3.1.2.2 Cost of Capital Cost of Equity Capital CAPM k E = R f + (RM − R f ) ⋅ β E where kE Rf RM – RF βE cost of equity capital risk-free return expected return on the market portfolio – risk-free return, expected Risk premium beta equity = systematic or market risk of equity The beta equity (β E) can be calculated using the following formula: βA = βD where βA βD βE tc D E D( 1 − t c ) E + βE D( 1 − t c ) + E D( 1 − t c ) + E beta asset beta debt beta equity marginal VIEW DOCUMENT
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Economics

1812 words - 8 pages percentage change in sales __( =%(Q/%(I thus, 3 = %(Q/4 %(Q = 12% 7. Optimal use of multiple inputs. In his shop, Julian Valenti retrofits sunroofs into automobiles. The process can use a combination of skilled labor and unskilled labor. Given his current mix of employees, the marginal product of the last unit of skilled labor is 3 sunroofs per day, and the marginal product of the last unit of unskilled labor is 1 sunroof per day. Current market rates for skilled and unskilled labor is $40 and $10, respectively. Is Julian using a least cost combination of inputs? If not, which of type of labor should he use relatively more? Comparison Expression: Compare __MPS VIEW DOCUMENT
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Econ - 2191 words

2191 words - 9 pages . C) at least one factor of production is fixed. D) all factors of production are fixed. Answer: C Question 9. Which of the following is true regarding perfect competition? I. The firms are price takers. II. Marginal revenue equals the price of the product. III. Established firms have no advantage over new firms. A) I and II B) II and III C) I, II and III D) I only Answer: C Question 10. The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price equals $16 per unit, A) the market is in its long-run equilibrium. B) over time, firms will leave this market. 4 C) the firm is making zero economic profit. D) over VIEW DOCUMENT
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Perfect Competitive Markets

2193 words - 9 pages and the price, so that they can earn long term profits. 2) Profit Maximization How can a firm gains persistently greater profits? However, except entry market stage, perfectly competitive firms can earn profits; in the long run, a perfectly competitive firm’s profits are always equal to ZERO!!! Therefore, firms always want to be a monopoly. When a firm entry the competitive market, price determine everything, even determine the output of the firm. This lead perfectly competitive firm’s maximizing profits rules: Marginal Revenue* (MR) equal to Marginal Cost (MC). Usually, firm will select the output where MR=MC, let see Figure 1, which leads Total Revenue (TR) (no. of quantity sell X price VIEW DOCUMENT
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Bu224

2125 words - 9 pages spaghetti. Comparative advantage refers to who can produce something at the lowest marginal opportunity cost. b. Which tribe has the comparative advantage in meatball production? Explain why. The Tivoli tribe has the comparative advantage in meatball production because it only costs them 30 pounds of spaghetti to produce 50 pounds of meatballs whereas it costs the Frivoli tribe 40 pounds of spaghetti to produce 30 pounds of meatballs. Comparative advantage refers to who can produce something at the lowest marginal opportunity cost. In A.D. 100 the Frivoli discover a new technique for making meatballs that doubles the quantity of meatballs that they can produce each VIEW DOCUMENT
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Marketing

3402 words - 14 pages and quantity demanded be able to calculate elasticities. * Elastic: cars, Amazon DVDs, grapes, Barnes & Noble books * Inelastic: sugar, milk, beer, diabetic medication. * Price Elasticity of Demand = % change in quantity demanded / % change in price * What is marginal analysis? Why is it more useful, than say, examing only total costs or total revenues? * Examines what happens to a firm’s costs and revenues when production changes by one unit. Marginal analysis factors in the variable costs, average fixed costs, average variable costs, average total costs, marginal cost and marginal revenue which helps the firm keep track and have more accurate results on its VIEW DOCUMENT
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Pepsi Vs Coke

632 words - 3 pages Caledonia Products Integrative Problem 1. Why should Caledonia focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing whether to undertake the project? Free cash flows are being focused on because it the amount that Caledonia will receive and they will be able to reinvest that amount. Caledonia should analyze the free cash flow so that they are able to see the real amount of value or what the cost may be. The marginal value from the project would be in the incremental cash flow. The earnings would be much less if they were looking at it through the accounting profits. It would be less because of the depreciation would be considered an VIEW DOCUMENT
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Business Proposal

1874 words - 8 pages Business Proposal and Peer Review Feedback Chris Cook ECO/561 March 17, 2014 Willard Berry Business Proposal and Peer Review Feedback Week Four Revision Several areas in the economic analysis for Sony's virtual feedback harness require update. The first area is the method to determine the profit maximizing quantity. Profit is maximized, or loss minimized, at the output at which marginal revenue (or price in pure competition) equals marginal cost, provided that price exceeds average variable cost (McConnell, Brue, & Flynn, 2009, p. 189). To determine these factors, Sony must quantify resource demands as well as optimum product price. When Sony launched the Playstation 4 it cost VIEW DOCUMENT
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Important

602 words - 3 pages highly efficient CHP system that uses almost all available thermal energy (95 percent), average capital costs ($1,200/kilowatt [kW] turnkey), and an average interest rate (8 percent). The example also assumes that the CHP system is being installed as a retrofit; therefore, no capital cost offset was taken for a displaced boiler or other equipment. No backup power capability is included; therefore, no costs or benefits for this system capability are included. Given these assumptions, the energy savings for this CHP system would be the difference between the purchased price of electricity for the site and the $0.0618/kilowatt-hour (kWh) to produce electricity with the CHP system. Economic analyses, such as those shown in the example below, have led to substantial new CHP deployment in areas with electricity prices exceeding $0.07/kWh. However, many other fuel types, system configurations, and deal structures can overcome seemingly marginal economics if there is a strong technical fit and high efficiency. VIEW DOCUMENT
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Fin 370 Final Exam

2392 words - 10 pages hurdle rate set by the board of directors. C. the coupon rate of debt. D. the rate of return that must be earned on additional investment if firm value is to remain unchanged. 38) The marginal cost of preferred stock is equal to: A. the preferred stock dividend divided by the net market price. B. the preferred stock dividend divided by its par value. C. the preferred stock dividend divided by market price. D. (1 - tax rate) times the preferred stock dividend divided by net price. 39) The average cost associated with each additional dollar of financing for investment projects is: A. the marginal cost of capital. B. risk-free rate. C. beta. D. the incremental return. 40) Given the VIEW DOCUMENT
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Operation And Supply Management

1118 words - 5 pages parameter must be corrected in order to account for wasted units: for every 17 units demanded another unit must be added because even if that unit is not stored, it has been bought and its cost affects the marginal cost of every unit. In conclusion, the trade-off between the two choices led to the second option, even if it requires to throw 100 units per order it’s more efficient because the total cost decreases due to the reduction in the price of product B. Product C In this case, the following data are given and the Optimal Q (using the standard formula) would be: λ = 652 Q* = (2*700*652/6)1/2 = 390 Y(390) = (2*k* λ*h)1/2 = (2*700*652*6)1/2= 2,340.25 ₪. However, a constraint limiting product VIEW DOCUMENT
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Store Manager

907 words - 4 pages them to produce products that are indeed safe. 2- When stock price maximization takes place, ultimately the company is trying to produce better products and use newer technology which will benefit the consumer during evolving times. 3- Yes, based on regulations by the government, it is important for firms to behave ethically. Also, when they behave ethically, they develop a more loyal consumer base. E- The amount of cash flow, the timing of cash flows, and the risk involved with it affect the value of any investment. F- Free cash flows are the cash flows available after the firm has paid all of its expenses. G- The weighted average cost of capital is average return VIEW DOCUMENT
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Ecn101

3990 words - 16 pages supply Determinants of supply 3. Price Mechanism and Allocation of Resources. Interrelationship between demand and supply Equilibrium price and output Interrelationship between markets Compliments and substitutes Government intervention in the market - Maximum price, minimum price Tax and subsidies 4. Consumer Choice Utility Consumer Equilibrium Marginal utility theory Consumer surplus Indifference Curves 5. Production and Costs Production Diminishing returns Total, average and marginal products Returns to scale, increasing decreasing and constant Cost, revenue and profits VIEW DOCUMENT
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Finance

1608 words - 7 pages . a. Cumulative preference shares b. Non-cumulative preference shares c. Redeemable preference shares d. Perpetual shares 3. This type of risk arises from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes. a. Political risk b. Domestic risk c. International risk d. Industry risk 4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal. a. Future cost b. Specific cost c. Spot cost d. Book cost 5. This concept is helpful in formulating a sound & economical capital structure for a firm. a. Financial performance appraisal b. Investment evaluation c. Designing optimal corporate capital structure VIEW DOCUMENT
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Financial Management

1608 words - 7 pages . a. Cumulative preference shares b. Non-cumulative preference shares c. Redeemable preference shares d. Perpetual shares 3. This type of risk arises from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes. a. Political risk b. Domestic risk c. International risk d. Industry risk 4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal. a. Future cost b. Specific cost c. Spot cost d. Book cost 5. This concept is helpful in formulating a sound & economical capital structure for a firm. a. Financial performance appraisal b. Investment evaluation c. Designing optimal corporate capital structure VIEW DOCUMENT
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Bus 640 Homework Inspiring Minds/Bus640Homework.Com

4667 words - 19 pages the number of drivers employed? b. What number of drivers appears to be most efficient in terms of output per driver? c. What number of drivers appears to minimize the marginal cost of transportation assuming that all drivers are paid the same salary? 1. 2. The Palms Dry Cleaning Shop in Fort Lauderdale, Florida, faces a highly seasonal demand for its services, as the snow-birds retirees flock to Florida in mid-fall to enjoy the mild winter weather and then return to their main homes in mid-spring. Given this seasonality, Palms tries to keep the overhead costs as low as possible and therefore, often uses seasonal contracted labor to man its operations. The following table shows the VIEW DOCUMENT
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Tax Acct

1743 words - 7 pages tax paid on a certain amount of taxable income * Marginal tax rate: rate of tax paid on the highest dollar of income Calculation of Tax: Income - deductions = taxable income X tax rates = tax liability - tax payments/credits = tax refund or due with return * For TI up to $100,000 use tax tables * Use tax rate schedules for higher income * Tax rate tables are calculated at midpoint of range; rate schedules are precise Tax Forms: * 1040EZ must be: * Single or married filing jointly * Taxable income less than $100,000 * Have no dependents * May only have income from wages, unemployment and interest * 1040A must be VIEW DOCUMENT
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Mr. Cga

762 words - 4 pages a personal marginal tax rate of 47%, assuming that the difference between the market and call price of the bonds is treated as capital for tax purposes, what is the after-tax gain or loss per $1,000 of bond face value due to the calling of the old bonds? a) Call premium= 100,000,000*0.5*6%=$3,000,000 Flotation cost=2.5%*100,000,000=$2,500,000 These flotation costs are tax-deductible over five years. Annual tax savings is: 2,500,000/5*0.35 =$175,000 The after-tax effective annual rate of new debt is: [(1+0.045/2)^2 -1]*(1-0.35) = 2.96% PV of the future tax savings from the flotation costs is: PV=175,000* PVIFA (5, 2.96%)=$802,365 Net flotation costs: 2,500,000-802,365 VIEW DOCUMENT
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Principles Of Economics

2803 words - 12 pages supplied by Cable Company. At $ 50.00 there is an excess demand of 60,000 connections (80,000-20,000). Consumers are willing to buy 60,000 connections, but the cable company is willing to sell only 20,000 connections because price is less than the marginal cost of supplying connection number 20,001 and beyond. This mismatch between demand and supply will cause the price of cable connection to rise. Cable company will increase the price they charge for their limited supply of connections, and consumer will pay the higher price ultimately to get one of the few connections available. An increase in price eliminates excess demand by changing both quantity demanded and quantity supplied. As the VIEW DOCUMENT
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Eco 212 Final

2090 words - 9 pages that good is called a(n) a. price–quantity table b. complementary table c. demand schedule d. equilibrium schedule Week Two: Markets and Types of Goods Objective: Summarize the factors that affect labor supply and demand. 5. Which of the following will increase labor demand? a. Immigration b. Emigration c. Technology improvement d. Cost reduction 6. Which of the following events could decrease the demand for labor? a. An increase in migrant workers b. An increase in the marginal productivity of workers c. A decrease in demand for the final product produced by labor d. A decrease in the labor supply Objective: Compare and contrast public goods, private goods, common resources, and VIEW DOCUMENT